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The impact of trade policies the Trump administration began implementing in 2018 is starting to come into sharp relief. A new study suggests that Republican-leaning counties are among the areas that have been hit hardest by trading partners' retaliation to the U.S. tariffs.
The aggregate yearly loss to the U.S. economy from the trade war is about $7.8 billion, or 0.04 percent of the nation's gross domestic product, according to a working paper by a team of economists that includes Pablo Fajgelbaum, a UCLA professor of economics, as well as Pinelopi Goldberg, chief economist for the World Bank, Patrick Kennedy of UC Berkeley and Amit Khandelwal of Columbia University. The economists examined tariff data from the U.S. International Trade Commission and trade flow data from the U.S. Census.
Study - Prices - Buyers - Goods - Amount
The study found that prices faced by buyers of foreign goods increased by the same amount as the tariff, costing American consumers and businesses $68.8 billion per year, or almost 0.4 percent of gross domestic product. However, those losses are largely offset by the gains of U.S. companies that benefitted from the higher tariffs.
The authors also concluded that if the European Union and individual countries hit by the new U.S. tariffs—including China, Canada, Mexico, Russia and Turkey—had not retaliated with tariffs against U.S. producers, the aggregate effect of the U.S.-imposed tariffs would have been only one-third as large.
Decades - US - Policies - Trade - Barriers
For decades, U.S. policies tended toward lowering trade barriers, but in 2018, the Trump administration enacted several waves of tariff increases on specific...
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