Latest China Tariffs Will Cost $831 per Household,Report Says

The Trump administration’s latest increase in tariffs on Chinese imports is costing the average US household $831 a year through higher prices and reduced economic efficiency, according to a paper published by the Federal Reserve Bank of New York.

The tariffs, which essentially impose taxes on imported goods, will result in higher prices paid by importers and consumers, the New York Fed’s report said.

In addition, it said, the US economy stands to take a hit as companies buy more from suppliers outside China at prices higher than they paid before the tariffs. That shift means US importers are paying more, but the additional money isn’t going into the US Treasury.

The boost in the tariff rate is likely to accelerate the shift to other suppliers, the New York Fed report said.

“These higher tariffs are likely to create large economic distortions and reduce US tariff revenues,” economists Mary Amiti, Stephen Redding and David Weinstein wrote in the report. “Very high tariff rates can…cause tariff revenue to fall as buyers of imports stop purchasing imports from a targeted country and seek out imports from (less efficient) producers in other countries.”

—From?Wall Street Journal 2019.05.27

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