Description

This paper examines the short- and long-term effects of tariffs on Chilean exports using a novel micro-level panel from 2003 to 2024. The dataset includes firm-level exports by product and destination, tariffs, and macroeconomic controls. A relative tariff measure captures trade diversion. We find that a 10 percentage points increase in destination-country tariffs leads to a 5.9% drop in bilateral exports in the second year, focusing on the intensive margin. This effect is partially offset by the increase in shipments to other destinations. Findings are heterogeneous across sectors. Tariffs significantly reduce export levels, with results robust to alternative specifications, including Free Trade Agreements (FTA) controls.