Abstract: In order to evaluate the impact of trade barriers and fiscal policies on domestic and foreign economic cycles, this paper constructs a dynamic stochastic general equilibrium model including the heterogeneity of tradable and non-tradable goods manufacturers and the profit markup of imported goods based on the small open DSGE model, so as to further analyze the impact of self-sufficiency degree of commodity on the economy. The findings show that trade barriers and tax-cut fiscal policies can promote the supply of domestic factors, increase the level of output, and inhibit the flow and output of foreign factors. In terms of specific policies, the export tax rebate policy has the best effect, which can promote domestic and foreign trade circulation and stimulate consumption. Reducing consumption tax will improve trade circulation and consumption levels other than commodity exports; reducing labor income tax will promote the export of intermediate goods and consumer goods, improve domestic and foreign consumption level, and restrain the inflow of foreign goods; lowering the capital gains tax will transform the national economy into an export-oriented economy, increasing the two-way trade in intermediate products, increasing the one-way exports of consumer goods, and lowering the consumption welfare of domestic residents; imposing tariffs will transform the economic model into a processing export-oriented type, increasing the import of intermediate products and the export of consumer goods, and reducing the export of intermediate products, the import of commodities and the level of household consumption. Increasing the proportion of non-tradable goods in the household consumption basket can improve the long-term steady balance of domestic and foreign consumer goods and factor products, reduce domestic price levels, and improve economic stability.

Key words: economic"dual circulation", trade policy, opening up DSGE, steady state equilibrium