Impact of Tariff Barriers on Economic Development

This study analyzes the impact of tariff barriers on economic growth in ten ASEAN countries (Brunei, Cambodia, Indonesia, Laos, Myanmar, Malaysia, Singapore, Thailand, the Philippines, and Vietnam) from 2000 to 2022. While the positive relationship between trade liberalization and economic growth has been widely verified, the recent spread of high-tariff policies necessitates re-examining the effects of tariff variations on economic growth. In this study, the simple average applied tariff and the weighted average applied tariff are used as key independent variables, and a fixed effects model is employed for empirical analysis. The results indicate that a 1% increase in the simple average applied tariff rate is predicted to reduce GDP by approximately USD 21.5 billion, while a 1% increase in the weighted average applied tariff rate is expected to reduce GDP by about USD 14.1 billion. These findings suggest that the economic growth of ASEAN countries may be hindered by rising tariff barriers. This study highlights the need for ASEAN countries to establish trade and growth strategies that expand trade liberalization and reduce tariff barriers to achieve sustainable economic growth.