In the standard "optimal tariff" literature (ie Bhagwati Srinivasan 83), market power allows countries to bend terms of trade in their favor. This goes away if we have reciprocal retaliation. But, if the hegemon can in fact apply asymmetric tariffs, you get + welfare

The incidence of the benefit, as Ahmad points to, is tricky. Consumers do lose out with higher prices. But: -depends on how much domestic incidence is borne by consumers vs importing firms (more progressive if second) -depends what raised revenue is spent on (ie rebate or what)

cc @alz_zyd_

@alz_zyd_ Here's another paper, written by Bhagwati in 1969. Intervention to address outputs, self-sufficiency, defense, or resilience is the key question. Could have been written yesterday at American Compass!