The impact of the 2018 trade war on U.S. prices and welfare

Stephen Redding, Mary Amiti and David Weinstein

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

JEL-codes: F13 F14 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2019-03
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Citations: View citations in EconPapers (59)

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http://eprints.lse.ac.uk/102619/ Open access version. (application/pdf)

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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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:102619

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