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New China Tariffs Increase Costs to US Households
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New China Tariffs Increase Costs to US Households

Mary Amiti, Stephen J. Redding and David E. Weinstein
Federal Reserve Bank of New York, 2019
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Editorial Rating

8

Qualities

  • Analytical
  • Hot Topic

Recommendation

This illuminating analysis from economists Mary Amiti, Stephen J. Redding and David E. Weinstein finds that the higher tariffs on Chinese exports to the United States that took effect in May 2019 will inevitably influence the daily lives of Americans, as the 10% levies did in 2018. Because tariffs both raise the prices of goods and lower the demand for them, the authors determine that the duties will create significant market distortions and burdens on consumers.

Take-Aways

  • The costs from US tariffs on Chinese imports land on American consumers.
  • Rising costs result from the tax added to the base prices of goods imported from China and the “deadweight” loss of government revenue. 
  • The May 2019 tariff jump to 25% will have a large economic impact on supply chains, imported goods and tax receipts, and it will hit consumers harder than the 2018 tariffs. 

About the Authors

Mary Amiti is an assistant vice president at the Federal Reserve Bank of New York. Stephen J. Redding is an economics professor at Princeton University, and David E. Weinstein is an economics professor at Columbia University.

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