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We find that prior to World Trade Organization membership, countries setimport tariffs 9 percentage points higher on inelastically supplied importsrelative to those supplied elastically. The magnitude of this effect is similar tothe size of average tariffs in these countries, and market power explains more ofthe tariff variation than a commonly used political economy variable. Moreover,US trade restrictions not covered by the WTO are significantly higher on goodswhere the United States has more market power. We find strong evidence thatthese importers have market power and use it in setting noncooperative tradepolicy. (JEL F12, F13)