President Donald Trump falsely claims that China and other nations have paid the tariffs he levied on thousands of products over the past two years. But “approximately 100 percent” of those costs have fallen onto American buyers, according to a new National Bureau of Economic Research paper.
“Using another year of data including significant escalations in the trade war, we find that US tariffs continue to be almost entirely borne by US firms and consumers,” the economists — Mary Amiti of the Federal Reserve Bank of New York, Stephen J. Redding of Princeton, and David E. Weinstein of Columbia University — wrote in a paper that was circulated this week.
A 10% tariff is associated with about a 10% drop in imports for the first three months, according to the economists, and this relationship becomes more intense as time goes on. So the effects of tariffs, which were increased this fall, may have not yet been fully seen.
The paper, which uses customs data through October 2019, reflects a series of similar independent findings that have been circulated over the past year.
“The continued stability of import prices for goods from China means US firms and consumers have to pay the tariff tax,” New York Federal Reserve economists Matthew Higgins, Thomas Klitgaard, and Michael Nattinger wrote in a November study.
The US and China plan to sign this month to sign an interim trade agreement, which was reached in October as the two sides sought to defuse tensions. That stalled several planned escalations, but tariffs were kept on thousands of products shipped between the two largest economies.