US companies and consumers, not China, are paying for Trump’s tariffs. A paper released by the National Economic Research Agency on Monday states that US companies and consumers have almost assumed (To China) The full cost of tariffs, and the impact of tariffs on imports will gradually increase over time.
According to the logic of traditional trade theory, the tariffs levied by the United States will prompt foreign companies to reduce prices, thereby forcing them to bear the cost of tariffs. But research by researchers at the Federal Reserve Bank of New York, Mary Amiti, Stephen Redding of Princeton University, and David Weinstein of Columbia University, shows that U.S. tariffs have not had a significant impact on foreign export prices. As companies strive to restructure their supply chains, American companies and consumers bear almost all tariff costs in many areas.
The authors write that “10% tariffs on imported goods continued to reduce imports by about 10 percentage points in the first three months, but this effect doubled in subsequent months.” This shows that “2018 Tariffs-many of which were implemented in October, and the impact on US imports has only now begun to appear. “Another working paper from the research bureau shows that tariffs from 2018 to 2019 have also weakened US exports.
The latest data from the New York Times article on January 7 shows that US companies and consumers, not China, have suffered the financial shocks of the Trump trade war. Researchers examined the impact of tariffs on data as of October and found that Americans continue to pay these taxes. Their paper found that “nearly 100%” of import duties fell on American buyers. The findings are the latest evidence that U.S. voters and businesses are paying the price for Trump’s attempts to use tariffs to facilitate U.S. terms of trade. Manufacturing is declining. Economists attribute this part to the uncertainty caused by the U.S.-China trade dispute. Company executives want to wait and see how the tension develops, which affects corporate investment.
Trump and his supporters originally expected tariffs to bring China back to the negotiating table, but recent research suggests that the leverage is already too expensive for some American businessmen and consumers. The new study used customs data to assess the impact and examined the import value before and after the implementation of tariffs, and found that tariffs have little impact on China. Earlier, similar studies had examined the impact of Trump’s tariff escalation in early 2018. For example, at the end of December, a study released by Fed economists found that from the perspective of protecting US companies, the cost of tariffs exceeds the positive impact of tariffs. Professor Weinstein said: “We haven’t seen foreigners bear the (tariff) costs at all. This surprised me.”
Another October study by researchers at Harvard University, the University of Chicago, and the Boston Federal Reserve Bank also showed that almost all costs of tariffs were passed on from Chinese companies to US importers.