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I agree that that is typically true, but in the particular case of the 2018 tariffs on China, the cost pretty much fell entirely on consumers. > Overall, using
by rrss 7y ago
I agree that that is typically true, but in the particular case of the 2018 tariffs on China, the cost pretty much fell entirely on consumers.
> Overall, using standard economic methods, we find that the full incidence of the tariff falls on domestic consumers, with a reduction in U.S. real income of $1.4 billion per month by the end of 2018
> We find that the U.S. tariffs were almost completely passed through into U.S. domestic prices
https://www.nber.org/papers/w25672.pdf https://www.nber.org/papers/w25672.pdf
- zaroth 7y agoThanks for the link! It looks like initially the price spikes by pretty much the tariff rate, and then over the following months returns back in line with the long term trend line. This makes sense because we also see a significant reduction in import volume from of the goods being taxed, so it implies producers are finding alternate suppliers to avoid the China-specific tariffs at close to the China-supplier price.