According to NBC, research from the Federal Reserve Bank of New York, Princeton University, and Columbia University has found that Trump’s trade policies and tariffs cost Americans $1.4 billion every month.
The economists- Mary Amiti from the New York Fed, Professor Stephen Redding from Princeton, and Professor David Weinstein from Columbia- said that there were “substantial increases” in the price of goods last year and that Americans lacked import variety and suffered from a disruption to their supply chains.
“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,” the researchers wrote. “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.”
Losses accumulated at a rate of $1.4 billion per month by last November, but the total losses from January 2018 to November 2018 were estimated to be $6.9 billion.
The trade war between China and the U.S. was started by Trump to protect the intellectual property of Americans and also to curb the trade deficit. Yet, American consumers were harmed from the trade war because there was less variety on the goods they could purchase.
“These results suggest that some of the tariffs were prohibitive, reducing imports to zero. This can create a measurement problem that can arise if we try to assess the price impacts of tariffs on goods that are no longer imported.”
The trade war also caused issues with the supply chain, as billions of dollars in trade is lost as companies and customers attempt to circumvent tariffs.
“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 economists wrote. “We also find that U.S. producers responded to reduced import competition by raising their prices.”