The Impact of the 2018 Trade War on U.S. Prices and Welfare

Stephen Redding, Mary Amiti and David Weinstein

No 13564, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper explores the impacts of the Trump administration’s trade policy on prices and welfare. Over the course of 2018, the U.S. experienced substantial increases in the prices of intermediates and final goods, dramatic changes to its supply-chain network, reductions in availability of imported varieties, and complete passthrough of the tariffs into domestic prices of imported goods. Overall, using standard economic methods, we find that the full incidence of the tariff falls on domestic consumers, with a reduction in U.S. real income of $1.4 billion per month by the end of 2018. We also see similar patterns for foreign countries who have retaliated against the U.S., which indicates that the trade war also reduced real income for other countries.

Keywords: International trade; Tariffs; Trade war (search for similar items in EconPapers)
JEL-codes: F13 F14 (search for similar items in EconPapers)
Date: 2019-03
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (68)

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Related works:
Working Paper: The impact of the 2018 trade war on US prices and welfare (2019)
Working Paper: The impact of the 2018 trade war on U.S. prices and welfare (2019)
Working Paper: The impact of the 2018 trade war on U.S. prices and welfare (2019)
Working Paper: The Impact of the 2018 Trade War on U.S. Prices and Welfare (2019)
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