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Who pays the Trump tariffs?….. – Publications – AEI

Summary:
AEI Who pays the Trump tariffs?….. ….”We Do, These Americans Say,” according to a Wall Street Journal article by that name written by Greg Ip, here’s a money quote (italics added): David Weinstein, a trade economist at Columbia University, and two co-authors examined the six waves of tariffs Mr. Trump imposed last year and found prices exporters charged to American customers barely responded to the tariff. Once the duty is included, they estimate Chinese imports’ prices jumped 20% to 25%. Americans paid in two ways: U.S. importers’ profit margins absorbed some tariff, and some end-consumers paid higher prices. Goldman Sachs economists found consumer prices of the nine most-affected goods have risen 3% since early 2018 while all other goods (excluding food and energy) have fallen 2%. They

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AEI
Who pays the Trump tariffs?…..

….”We Do, These Americans Say,” according to a Wall Street Journal article by that name written by Greg Ip, here’s a money quote (italics added):

David Weinstein, a trade economist at Columbia University, and two co-authors examined the six waves of tariffs Mr. Trump imposed last year and found prices exporters charged to American customers barely responded to the tariff. Once the duty is included, they estimate Chinese imports’ prices jumped 20% to 25%. Americans paid in two ways: U.S. importers’ profit margins absorbed some tariff, and some end-consumers paid higher prices. Goldman Sachs economists found consumer prices of the nine most-affected goods have risen 3% since early 2018 while all other goods (excluding food and energy) have fallen 2%. They found some American manufacturers took advantage of the tariff to raise their prices, exactly as protectionist tariffs are meant to work.

Mr. Weinstein and his co-authors conclude Mr. Trump’s tariffs have been fully borne by Americans, at a net cost to the country of $1.4 billion per month. Mr. Trump has claimed China has absorbed 21 percentage points of the 25% tariff, but that appears to be based on one study that used research Mr. Weinstein co-authored in 2006. Mr. Weinstein says that work wasn’t based on experience with actual tariffs, whereas his latest paper is.

MP: So despite what you hear from Tariff Man about how “tariffs are NOW being paid to the United States of 25% on $250 billion worth of goods and services,” it’s Americans who are paying the tariffs taxes imposed on goods imported from China.

Who pays the Trump tariffs?…..
Mark Perry

Mark Perry
Mark J. Perry is concurrently a scholar at AEI and a professor of economics and finance at the University of Michigan’s Flint campus. He is best known as the creator and editor of the popular economics blog Carpe Diem. At AEI, Perry writes about economic and financial issues for American.com and the AEIdeas blog.

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