The effect of additional custom duties on Türkiye's imports

To manage the COVID-19 pandemic, countries took different economic measures in 2020. During the initial phase of the pandemic, Türkiye introduced additional custom duties for a range of product groups. Additional custom duties (ACD) were enforced for 5,220 products out of 18,876 different products. In this study, the effect of additional custom duty rates on Türkiye's imports was investigated. These additional duties were in place till the end of 2020. By this regulation, only 6.9% of total imports were covered at value basis. The additional custom duties are not implemented in trade with European Union (EU) and Free Trade Agreement (FTA) countries, which are Türkiye's major trading partners of Türkiye. But other countries such as China was not exempt. This way of implementation of the ACDs allows us to employ difference in differences (DID) approach. We found a significant impact of the ACDs on Türkiye's imports which especially shows that it caused substitution towards countries with no additional customs duties.