decisions and find tariff increases are more likely in sectors with larger potential terms-of-trade gains, a theoretical prediction arising from dynamic models of self-enforcing trade agreements.

The current paper further informs our understanding of import tariffs by providing a detailed investigation into the macroeconomic determinants of time-varying trade policy. While there is an empirical presumption that import protection rises during recessions, with the exception of papers like Bagwell and Staiger (2003) and Crowley (2010) there is surprisingly little economic theory articulating the channels through which the countercyclical relationship between new import restrictions and macroeconomic shocks arise.<sup>2</sup> Thus, one purpose of this paper is to provide, in as much detail as possible, evidence on the explicit linkages between macroeconomic shocks and import protection.

Our paper is most closely related to the literature on the macroeconomic determinants of antidumping protection that includes Feinberg (1989), Knetter and Prusa (2003), and Crowley (2011).<sup>3</sup> Relative to that work, our approach makes a number of advances, extensions and refinements by taking advantage of newly available and detailed data at the product-level from the World Bank’s _Temporary Trade Barriers Database_ (Bown, 2011b). First, we examine not just antidumping policy, but we also consider use of other, relatively substitutable forms of import protection that have taken on particular importance in the first decade of the 2000s, such as global safeguards, China-specific safeguards, and countervailing duties. Second, we focus our analysis on precise, bilateral measures of 2 In their theoretical paper, Bagwell and Staiger (2003, pp. 1-2) best articulate the failure of “political” or “distributional” theories for trade policy to explain the countercyclical relationship between business cycles and import protection policies with “...a common argument is that tariffs are higher in recessions, because the political pressure from import-competing firms is then most pronounced. This explanation, however, is incomplete, since it ignores the political influence of other production sectors that might press for _less_ protection in recessions...In light of these competing political influences, the common argument for countercyclical tariffs fails to be convincing, as it does not explain why the political pressures from import-competing sectors dominate in recessions but not in booms.” Bagwell and Staiger (2003) also contains extensive reference to a number of empirical papers from earlier periods documenting the countercyclical relationship between business cycles and import protection.

> 3 Feinberg (1989) focused on the 1982-1987 period for the United States and found evidence that more antidumping cases were associated with dollar depreciations. Knetter and Prusa (2003) examine annual data for the US, Canada, Australia and the EU over 1980-1998 and find strong evidence of a relationship between antidumping cases and local currency appreciations over this longer time series of data. Crowley (2011) uses a cross-country, cross-industry panel from 1980-2001 and finds that the US imposed antidumping against foreign trading partners with weakness in manufacturing sectors.

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