A new study conducted by researchers from Harvard University, the University of Chicago, and the Federal Reserve suggests that Donald Trump’s tariffs on China fall onto United States consumers and importers. The study has yet to be published and is listed as “preliminary and incomplete,” but the data thus far lends credence to suggestions that Trump’s trade war is detrimental to Americans.
According to the paper, researchers discovered a “nearly complete” transfer of tariff costs onto importers. From here, Newsweek reports that importers can pass these costs to consumers and other purchasers, which the researchers say suggests that China tariffs have “fallen largely on the U.S.”
The study also found that U.S. exporters might also be paying more thanks to retaliatory tariffs from China. According to the researchers, exporters “have dropped their prices in response to foreign trade policies,” which means that they are negatively impacted by some of China’s tariffs via a decrease in their income.
A previous study released in March echoed the recent findings and found that most of Trump’s China tariffs are absorbed by U.S. consumers and importers, per UCLA.
Per The Inquisitr, Fox Business host Charles Payne used his recent appearance on America’s Newsroom to express his belief that Trump’s threat to add new tariffs to $300 billion more Chinese imports could cause a “global recession.”
“It could, it could,” Payne said in response after being asked if the tariffs could cause a recession, per Newsweek. “I mean, we’ll see. A lot of people are hoping that maybe the backchannels [between U.S. and Chinese negotiators] are being used right now.”
A new study has confirmed that President Trump's claims about China paying for his tariff war are simply untrue https://t.co/YmBm51X4Ql— Newsweek (@Newsweek) August 8, 2019
BBC News reports that Trump’s former top adviser, Gary Cohn, believes that Trump’s tariff war has dramatically impacted U.S. manufacturing and capital investment. He also believes that the trade war gives China a great window to slow down its overheated economy.
“I think everyone loses in a trade war,” he said. “We are an 80% service economy. The service side of the economy is doing very well, because, guess what, it’s not being tariffed.”
But Cohn said that tariffs are making it expensive to import many vital products from China, which he says negate the president’s tax cuts that were intended to stimulate the U.S. economy.
However, Joseph Hinrichs, president of automotive at U.S. carmaker Ford, claims that the impact of Trump’s tariffs has “subsided.”
“Last year, there was a significant impact to our business because of steel and aluminium tariffs,” he said, adding that currently, the impact is not as bad.