Tariff war cost US companies and consumers US$4.4 billion a month in 2018, report says
- Economists find those who were exposed to the duties overseas ‘paid none of the bill’ – which was passed on to American importers and consumers
- They say the US economy has been damaged by the dispute that has seen tariffs applied on about US$283 billion of imports
Washington’s tariff war against its trading partners, particularly China, cost American companies and consumers US$4.4 billion a month last year, according to researchers.
Economists from the New York Federal Reserve and Princeton and Columbia universities assessed the impact of the duties on prices and welfare in the United States, concluding that those who were exposed to the duties overseas “paid none of the bill”.
It also comes after US Federal Reserve chairman Jerome Powell last week warned of a slowing US economy this year and other risks, including a global slowdown, volatile financial markets and uncertainty over American trade policy.
In the paper, titled “The impact of the 2018 trade war on US prices and welfare”, Mary Amiti, Stephen Redding and David Weinstein said fallout from the dispute – which has seen tariffs applied on about US$283 billion of American imports – had damaged the economy.
They said it had cost US consumers and the firms that import foreign goods an extra US$3 billion per month in added tax costs and another US$1.4 billion a month in deadweight losses – overall welfare costs to society.