Who's Paying for the US Tariffs? A Longer-Term Perspective / Mary Amiti, Stephen J. Redding, David E. Weinstein.

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Amiti, Mary

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w26610.Publication details: Cambridge, Mass. National Bureau of Economic Research 2020.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Using data from 2018, a number of studies have found that recent U.S tariffs have been passed on entirely to U.S. importers and consumers. These results are surprising given that trade theory has long stressed that tariffs applied by a large country should drive down foreign prices. Using another year of data including significant escalations in the trade war, we find that U.S. tariffs continue to be almost entirely borne by U.S. firms and consumers. We show that the response of import values to the tariffs increases in absolute magnitude over time, consistent with the idea that it takes time for firms to reorganize supply chains. We find heterogeneity in the responses of some sectors, such as steel, where tariffs have caused foreign exporters to drop their prices substantially, enabling them to export relatively more than in sectors where tariff passthrough was complete.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w26610 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w26608 Recovering Investor Expectations from Demand for Index Funds /	nber w26609 The Global Impact of Brexit Uncertainty /	nber w2661 The Effects of Japanese Social Security Retirement Benefits on Personal Savings and Elderly Labor Force Behavior /	nber w26610 Who's Paying for the US Tariffs? A Longer-Term Perspective /	nber w26611 Rising Import Tariffs, Falling Export Growth: When Modern Supply Chains Meet Old-Style Protectionism /	nber w26612 Contract Work at Older Ages /	nber w26613 Deterministic Debt Cycles in Open Economies with Flow Collateral Constraints /	Next

January 2020.

Using data from 2018, a number of studies have found that recent U.S tariffs have been passed on entirely to U.S. importers and consumers. These results are surprising given that trade theory has long stressed that tariffs applied by a large country should drive down foreign prices. Using another year of data including significant escalations in the trade war, we find that U.S. tariffs continue to be almost entirely borne by U.S. firms and consumers. We show that the response of import values to the tariffs increases in absolute magnitude over time, consistent with the idea that it takes time for firms to reorganize supply chains. We find heterogeneity in the responses of some sectors, such as steel, where tariffs have caused foreign exporters to drop their prices substantially, enabling them to export relatively more than in sectors where tariff passthrough was complete.