According to new research provided by the Federal Reserve Bank of New York, Princeton University, and Columbia University, Americans are losing big economically due to President Donald Trump’s tariffs and trade wars.
In a report, the analysis shows that “businesses and consumers saw ‘substantial increases’ to the tune of $1.4 billion per month by the end of last November,” reports NBC News.
According to comments within the report, “Economists have long argued that there are real income losses from import protection. Using the evidence to date from the 2018 trade war, we find empirical support for these arguments.”
“Losses mounted steadily over the year, as each wave of tariffs affected additional countries and products, and increased substantially after the imposition of the wave 6 tariffs on $200 billion dollars of Chinese exports,” the report continued.
In the report, New York Fed’s Mary Amiti, Princeton professor Stephen Redding, and Columbia professor David Weinstein revealed that losses were accumulating at a rate of $1.4 billion per month by last November, with the total from January 2018 through November 2018 conservatively estimated to be at $6.9 billion.
The NBC analysis added, “That number may be too low, the economists said, because their model assumes that the U.S. government uses tariff tax revenues to offset the welfare burden. If the U.S. government did not offset the cost of the tariffs to the American consumer with the new tax revenues, the full value of the tariff payments would be $12.3 billion.”
“We find that the U.S. tariffs were almost completely passed through into U.S. domestic prices, so that the entire incidence of the tariffs fell on domestic consumers and importers up to now, with no impact so far on the prices received by foreign exporters,” the Fed, Princeton and Columbia economists wrote. “We also find that U.S. producers responded to reduced import competition by raising their prices.”
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