This paper examines the trade and welfare effects of tariff changes in the context of the North American Free Trade Agreement (NAFTA) using a Ricardian model that incorporates sectoral linkages, trade in intermediate goods, and sectoral heterogeneity in production. The authors propose a new method to estimate sectoral trade elasticities, which are consistent with any trade model that delivers a multiplicative gravity equation. They apply their model to quantify the impact of NAFTA's tariff reductions, finding that Mexico's welfare increases by 1.31%, the U.S.'s by 0.08%, and Canada's by 0.06%. The model also shows that intra-bloc trade increases by 118% for Mexico, 11% for Canada, and 41% for the U.S. The study highlights the importance of sectoral heterogeneity, intermediate goods, and sectoral linkages in quantifying the welfare gains from tariff reductions. The results are robust across different models, with welfare effects being 71% lower in a one-sector model, 62% lower in a model without materials, and 50% lower in a model without sectoral linkages.This paper examines the trade and welfare effects of tariff changes in the context of the North American Free Trade Agreement (NAFTA) using a Ricardian model that incorporates sectoral linkages, trade in intermediate goods, and sectoral heterogeneity in production. The authors propose a new method to estimate sectoral trade elasticities, which are consistent with any trade model that delivers a multiplicative gravity equation. They apply their model to quantify the impact of NAFTA's tariff reductions, finding that Mexico's welfare increases by 1.31%, the U.S.'s by 0.08%, and Canada's by 0.06%. The model also shows that intra-bloc trade increases by 118% for Mexico, 11% for Canada, and 41% for the U.S. The study highlights the importance of sectoral heterogeneity, intermediate goods, and sectoral linkages in quantifying the welfare gains from tariff reductions. The results are robust across different models, with welfare effects being 71% lower in a one-sector model, 62% lower in a model without materials, and 50% lower in a model without sectoral linkages.