Potential effects of US tariffs on the Marche economy: a dynamic multisectoral analysis
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Keywords

Tariff
Protectionist
Social Accounting Matrix
Dynamic Computable General Equilibrium

Abstract

The re-emergence of protectionism that was advanced by the new Presidency of the United States is expected to have an extensive impact on the  global economic landscape. The economic relations between the Marche region and the US are characterised by trade flows that are linked to specific industries, that can lead to a marked difference between, the amount, of exported and imported goods.

This paper constructs a Social Accounting Matrix for Marche and develops a Dynamic Computable General Equilibrium model to assess the direct, indirect and induced effects of the US import tariffs on the Marche regional system in both aggregated and disaggregated terms. Regional real GDP will, by estimation, reduce by 0.11% in 2025 and by 0.20% between 2026 and 2029. Household and corporation disposable income will undergo a significant contraction. The metallurgical and pharmaceutical industries alone will be responsible for almost 50% of the overall decrease, in real value added within the region over 2025.

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