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The United States and China are close to finalizing a trade deal that would roll back tariffs on at least $200 billion of the $250 billion worth of Chinese imports currently taxed by the U.S.
This may be good news for Americans, especially given new figures published by the Center for Economic Policy and Research (CEPR) on how much the U.S. and other countries lost in 2018 due to the administration's trade war.
Import - Tariffs - November - US - Importers
Because of import tariffs through November 2018, U.S. importers and consumers experienced $12.3 billion in added tax costs and $6.9 billion from reduced imports that otherwise would have been purchased at a lower price without the tariff, also known by economists as a "welfare cost."
If the import tariffs implemented through November of 2018 continue, an estimated $165 billion dollars of trade will be redirected in order to avoid the tariffs.
Figures - CEPR - Paper - Researchers - Princeton
The figures were published as a CEPR working paper by researchers from Princeton University, the Federal Reserve Bank, and Columbia University.
"The Trump tariffs were almost completely passed through into domestic prices up to now, meaning that almost all of the costs so far have been shouldered by U.S. consumers and importers," said Stephen Redding, Harold T. Shapiro '64 Professor in Economics and professor of economics and international affairs at Princeton University's Woodrow Wilson School of Public and International Affairs. "U.S. producers had to respond to reduced import competition by raising their prices or no longer offering certain imported goods."
Study - Mary - Amiti - Federal - Reserve
Redding co-authored the study with Mary Amiti from the Federal Reserve Bank of New York and David Weinstein at Columbia University.
In 2018, the U.S. imposed six waves of tariffs on a number of imports. The losses mounted steadily over the year, as each wave of tariffs affected additional countries and products from washing machines to steel and aluminum. The losses hit the...
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