The OEC Tariff Simulator

Tariffs shape economic landscapes. Governments have historically used them to protect domestic industries, generate revenue, adjust trade balances, or as leverage for negotiations. But understanding the impact of tariffs in a highly interconnected world is challenging. That’s why at the OEC we have created the OEC Tariff Simulator, a tool allowing anyone to explore the potential impact of tariffs by interacting with an advanced tariff model.

The OEC Tariff Simulator is based on a simple user interface and intuitive visualizations. To run a simulation users need to.

1. Select an importer country.
This is the country imposing an additional tariff on other countries in the simulation.

2. Select an exporter country.
This is the country targeted by the additional tariffs.

3. Select a tariff rate. 
These are the additional tariffs (in percentage points) imposed by the importer country. For instance, if current tariffs between countries A and B are 5%, then an additional 25% will bring these tariffs up to 30%.

Once the selection is completed, the OEC will retrieve the data needed to run the simulation and will display the result in three visualizations.

The first visualization shows the impact of additional tariffs on the trade sent from exporter to importer. For example, in a simulation where the United States imposes a 10% additional tariff on China, the simulation will show the change in Chinese exports to the United States estimated by the model.

The second visualization provides a competitor's view. In our example, if the US were to impose additional tariffs on China that can benefit other countries exporting a similar basket of products. These countries will now be more competitive in the United States import market. For example, additional tariffs on China could result in a boost for exporters in Indonesia which will now export more to the United States.

The third visualization assigns these additional exports to the products of each competitor. For example, do additional tariffs on China translate into Indonesia exporting more shoes and shirts to the United States?

Together these three visualizations allow you to explore the direct and indirect impact of tariffs with a few clicks. They answer three key questions:

• How tariffs impact the exporter?
• How do they impact the competitors of an exporter? And
• What competitor’s industries benefit from the added tariffs?

The OEC Tariff Simulator uses an expanded and revised version of the bilateral relatedness model developed by Jun et al. (2020). This is an extended gravity model that combines information on the current exports and imports by country and product, the distance between countries, their GDPs and populations, measures of cultural and geographic similarity (e.g. common language, shared borders), and measures of relatedness which capture spillovers among geographic neighbors and related products.

Our current implementation of the OEC tariff simulator is based on a model that explains more than 83% of the variance in future bilateral trade. This added accuracy (Jun et al. (2020) model explains only about 50% of the variance in future bilateral trade), comes from several improvements, including the use of a Poisson Pseudo Likelihood estimator, spinning functions for the impact of tariffs, and from independently estimating coefficients for HS product sections (e.g. different coefficients for garments, agricultural products, machinery, etc.). We estimated the model using millions of bilateral trade records going back one decade and validated the robustness of our coefficients by checking their stability across models trained using data from different time periods.

Like all tools, the OEC tariff simulator has some important limitations. Our current interface only shows the impact of tariffs applied to a single exporter (when many scenarios involve the simultaneous application of tariffs in various countries). Our model also doesn’t consider trade diverted into internal production, only trade diverted into trade with other countries. We also currently provide one estimation engine (our extended gravity model) and are not currently supporting other estimation methods (e.g. structural equation modeling or a general equilibrium model). Depending on the adoption and response received, we will be working on improvements to address these and other limitations.

You are free to use the OEC tariff simulator estimates, screenshots, and images following two conditions.

If you plan to publish a post, article, or note on the web, we request you please mention the Observatory of Economic Complexity (or OEC.world) as a source of your estimates and link back to us (either to the homepage or to the tariff simulator page).

If you plan to publish an academic article, whether it is in a working paper series, a peer-reviewed journal, or a pre-print repository such as the arxiv, we ask that you please cite us as:

The OEC Tariff Simulator. Viktor Stojkoski, Pablo Paladino, Jelmy Hermosilla, and César A. Hidalgo. URL (2025)

If you plan to publish a social media post (on X, LinkedIn, Instagram, etc), please mention that the source is OEC.world.

Reach out to us. We understand that there is much more to tariff impact than what our current online tool can do (e.g. simulating the simultaneous impact of added tariffs in multiple countries). The OEC team is ready to help you with your analytic needs. You can reach out to us at: support@oec.world

We plan to keep the OEC tariff simulator open for a few weeks for promotional purposes and will then roll it into the OEC Pro tier.

By simulating the impact of tariffs, the OEC tariff simulator allows users to explore different policy scenarios in an intuitive manner. We invite you to explore, imagine, and strategize with this new feature at the OEC. Go To Tariff Simulator