**Applied tariffs** . We now turn to the results on tariffs. Table 5 reports the results. Columns (1) and (4) report estimates of equation (7) with different sets of fixed effects. The coefficient on the interaction term between exchange rate and applied tariffs is negative and highly significant. We find strong support for rent-shifting effects of tariffs, i.e. tariffs reduce the elasticity of homecurrency export prices to the exchange rate, implying a higher pass-through.

Table 5: Import tariffs and pricing-to-market: Baseline

||(1)|(2)|(3)|(4)|(5)|(6)|
|---|---|---|---|---|---|---|
|Dep. var.|||ln unit|values|||
|Sample Split<br>||Ta|rif<br>||Ta|rif<br>|
|Subsample||Low|High||Low|High|
|ln RER|0.067<sup>_a_</sup><br>|0.178<sup>_a_</sup><br>|0.076<sup>_a_</sup><br>|0.057<sup>_b_</sup><br>|0.127<sup>_a_</sup><br>|0.045<sup>_c_</sup><br>|
||(0.023)|(0.023)|(0.024)|(0.023)|(0.022)|(0.024)|
|_×_ ln(# product_t_0)|0.050<sup>_a_</sup><br>(0.008)|||0.022<sup>_b_</sup><br>(0.011)|||
|_×_ ln(tarif +1)|-0.646<sup>_a_</sup><br>(0.101)|||-0.401<sup>_a_</sup><br>(0.088)|||
|ln(dest. GDP/cap)|0.084<sup>_a_</sup>|0.009|0.190<sup>_a_</sup>|0.051<sup>_b_</sup>|-0.086<sup>_c_</sup>|0.127<sup>_a_</sup>|
||(0.025)|(0.052)|(0.043)|(0.020)|(0.045)|(0.039)|
|Observations<br>|456838|208269|113044|273672|81739|73856|
|Adj. R<sup>2</sup>|0.979|0.981|0.961|0.985|0.987|0.965|
|Firm_×_product_×_dest. FE|Yes|Yes|Yes|Yes|Yes|Yes|
|Origin_×_year FE|Yes|Yes|Yes|No|No|No|
|Firm_×_product_×_year FE|No|No|No|Yes|Yes|Yes|

> _c_ significant at 10 percent; _b_ significant at 5 percent; _a_ significant at 1 percent. Standard errors clustered by product-origin-destination-year are in parentheses. High and Low mean respectively above (or equal to) the third quartile or below (or equal to) the first quartile of the corresponding variable. ln RER is the real exchange rate of the destination country vis-a-vis the USD. ln(# product _t_ 0) is the total number of products exported by the firm at the beginning of the period.

How large are the effects? Faced with a 10 percent depreciation of its home currency, firm _f_ selling a tariff-free product in a given destination would raise its home-currency price by 0.6-0.7 percent (column 1 or 4). Faced with the same depreciation on a destination with a 5 percent tariff, it would raise it by only 0.35-0.37 percent, or about half as much. When the tariff reaches 10-15 percent, pass-through is complete, i.e. no significant PTM is detected anymore. Similar results are obtained in columns (2), (3), (5) and (6), which report results for destination-product ( _dp_ ) cells in the highest quartile of tariffs (where they are above 9 percent) vs. the lowest (where they are zero). In the latter, firms raise their home-currency price by 1.3-1.8 percent following a 10 percent depreciation. In the former, they raise it by 0.4-0.8 percent. Thus, tariffs at their current levels have substantial effects on the pricing behavior of foreign exporters, suggesting that they affect market structure (presumably through rent-shifting effects) in a non-trivial way.

**Firm-level quantification** . To illustrate the differential effect of tariffs and NTMs on PTM, we compute the predicted degree of PTM for various combinations of tariffs and non tariff measures. The results are shown in Figure 1. The estimates are based on a specification where both tariffs and NTMs are introduced simultaneously (Table 6 in the next section). The online appendix C.5 reports an equivalent using the coefficients from a specification that includes firm _×_ product _×_

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