Wednesday , August 21 2019
Home / The Angry Bear / U.S. Consumers Have Borne the Brunt of the Current Trade War

U.S. Consumers Have Borne the Brunt of the Current Trade War

Summary:
The National Bureau of Economic Research has highlighted two studies. (hat tip Spencer England) U.S. Consumers Have Borne the Brunt of the Current Trade War Recent tariff increases are unprecedented in the post-World War II era in terms of breadth, magnitude, and the sizes of the countries involved. In 2018, the United States imposed tariffs on a variety of imported goods, and other countries responded with tariffs on imports from America. Two new NBER working papers analyze how this “trade war” has affected U.S. households and firms. The recent tariffs, which represent the most comprehensive protectionist U.S. trade policy since the 1930 Smoot-Hawley Act and 1971 tariff actions, ranged from 10 to 50 percent on about 0 billion of U.S. imports —

Topics:
Dan Crawford considers the following as important: , , ,

This could be interesting, too:

Dan Crawford writes Amazon, FedEx and the Post Office

run75441 writes Sunday Morning Commentary

NewDealdemocrat writes Industrial production, jobless claims, and retail sales

NewDealdemocrat writes Quick hits on a major Thursday economic news blitz

The National Bureau of Economic Research has highlighted two studies. (hat tip Spencer England)

U.S. Consumers Have Borne the Brunt of the Current Trade War

Recent tariff increases are unprecedented in the post-World War II era in terms of breadth, magnitude, and the sizes of the countries involved.


In 2018, the United States imposed tariffs on a variety of imported goods, and other countries responded with tariffs on imports from America. Two new NBER working papers analyze how this “trade war” has affected U.S. households and firms.

The recent tariffs, which represent the most comprehensive protectionist U.S. trade policy since the 1930 Smoot-Hawley Act and 1971 tariff actions, ranged from 10 to 50 percent on about $300 billion of U.S. imports — about 13 percent of the total. Other countries responded with similar tariffs on about $100 billion worth of U.S. exports.

In The Impact of the 2018 Trade War on U.S. Prices and Welfare (NBER Working Paper No. 25672), Mary AmitiStephen J. Redding, and David Weinstein find that the costs of the new tariff structure were largely passed through as increases in U.S. prices, affecting domestic consumers and producers who buy imported goods rather than foreign exporters.

Pablo D. FajgelbaumPinelopi K. Goldberg,Patrick J. Kennedy, and Amit K. Khandelwaladopt a different methodological approach to address the welfare effect of recent tariffs. They also find complete pass-through of U.S. tariffs to import prices. In The Return to Protectionism (NBER Working Paper No. 25638), they estimate that the new tariff regime reduced U.S. imports by 32 percent, and that retaliatory tariffs from other countries resulted in an 11 percent decline of U.S. exports.

Dan Crawford
aka Rdan owns, designs, moderates, and manages Angry Bear since 2007. Dan is the fourth ‘owner’.

Leave a Reply

Your email address will not be published. Required fields are marked *