Import Source Reallocation and Aggregate Price Dynamics in the United States

Dawn Chinagorom-Abiakalam and Fernando Leibovici

No 2025-018, Working Papers from Federal Reserve Bank of St. Louis

Abstract: This paper studies the impact of changes in the composition of U.S. import sources on aggregate import prices and their implications for consumer prices. We decompose import price changes into within-source price adjustments and changes in sourcing composition. Using bilateral import data, we find that sourcing from lower-cost suppliers, particularly China, put sustained downward pressure on aggregate import prices until the mid-2010s. Since then, shifts away from China have partially reversed this effect, raising both import and consumer prices. We also find sourcing reallocation responds sharply to trade policy, playing a notable role during the 2018 U.S.–China trade war.

Keywords: import prices; consumer prices; import source reallocation (search for similar items in EconPapers)
JEL-codes: C43 E1 E31 F14 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2025-08-15
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DOI: 10.20955/wp.2025.018

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