{
  "title": "Long-term Effects of US Tariff Increases on CAPDR",
  "publication": "IMF Working Papers, June 19, 2026",
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  "summary": "In a series of declarations throughout 2025 and into 2026, the United States announced higher tariffs on nearly all imports from most countries.",
  "sections": [
    {
      "heading": "Summary overview",
      "content": "- In a series of declarations throughout 2025 and into 2026, the United States announced higher tariffs on nearly all imports from most countries.\n- The CAPDR region comprises Costa Rica, Dominican Republic, Guatemala, Honduras, Nicaragua, Panama and El Salvador.\n- CAPDR countries are affected through sizeable direct trade linkages with the United States, and through indirect trade linkages with third countries.\n- The paper uses a multi-region multi-industry model of the global economy to explore potential long-term economic effects of these tariff increases on CAPDR.\n- Ongoing legal challenges introduce additional uncertainty regarding the ultimate extent of tariff changes; the paper’s results remain broadly valid providing the tariffs remain in place."
    },
    {
      "heading": "Methodology",
      "content": "- Modeling approach: multi-region multi-industry model of the global economy.\n- Focus: long-term economic effects on the CAPDR region from US tariff increases announced in 2025 and into 2026.\n- Key channels considered: direct export exposure to the United States and indirect trade linkages via third countries."
    },
    {
      "heading": "Major findings",
      "content": "- CAPDR member countries will experience falls in real GDP to varying degrees.\n- The severity of GDP effects is closely linked to direct export exposure to the United States.\n- The most vulnerable industries are heavily trade-exposed manufactures.\n- Exemptions—most importantly for textiles & apparel—may provide some scope for trade diversion to offset some GDP losses."
    },
    {
      "heading": "Policy implications and considerations",
      "content": "- Countries with higher direct export exposure to the United States are more vulnerable and may require targeted policy responses.\n- Trade diversification and seeking opportunities for trade diversion where exemptions exist (notably textiles & apparel) could mitigate some GDP losses.\n- Legal uncertainty over tariff permanence suggests contingency planning for scenarios with tariffs remaining in place.\n\nSource: Alexander Subramaniam Beames, Long-term Effects of US Tariff Increases on CAPDR, IMF Working Paper No. 2026/125 (June 19, 2026).\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2026/06/19/long-term-effects-of-us-tariff-increases-on-capdr-577065"
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    "Authors: Alexander Subramaniam Beames",
    "Published: June 19, 2026",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798229049276.001",
    "In a series of declarations throughout 2025 and into 2026, the United States announced higher tariffs on nearly all imports from most countries.",
    "The CAPDR region comprises Costa Rica, Dominican Republic, Guatemala, Honduras, Nicaragua, Panama and El Salvador.",
    "CAPDR countries are affected through sizeable direct trade linkages with the United States, and through indirect trade linkages with third countries.",
    "The paper uses a multi-region multi-industry model of the global economy to explore potential long-term economic effects of these tariff increases on CAPDR.",
    "Ongoing legal challenges introduce additional uncertainty regarding the ultimate extent of tariff changes; the paper’s results remain broadly valid providing the tariffs remain in place.",
    "Modeling approach: multi-region multi-industry model of the global economy.",
    "Focus: long-term economic effects on the CAPDR region from US tariff increases announced in 2025 and into 2026.",
    "Key channels considered: direct export exposure to the United States and indirect trade linkages via third countries.",
    "CAPDR member countries will experience falls in real GDP to varying degrees.",
    "The severity of GDP effects is closely linked to direct export exposure to the United States.",
    "The most vulnerable industries are heavily trade-exposed manufactures.",
    "Exemptions—most importantly for textiles & apparel—may provide some scope for trade diversion to offset some GDP losses.",
    "Countries with higher direct export exposure to the United States are more vulnerable and may require targeted policy responses.",
    "Trade diversification and seeking opportunities for trade diversion where exemptions exist (notably textiles & apparel) could mitigate some GDP losses.",
    "Legal uncertainty over tariff permanence suggests contingency planning for scenarios with tariffs remaining in place.",
    "**Working Paper**"
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