IMF report: US tariffs on China are almost entirely paid by US importers

IMF report: US tariffs on China are almost entirely paid by US importers

A study released by the International Monetary Fund (IMF) on Thursday found that in the US-China trade war, the US tariffs on Chinese goods are “almost all” borne by US importers.

The trade dispute between the United States and China has been more than one year. During this period, the two sides exchanged tariffs on goods worth hundreds of billions of dollars. However, IMF research shows that almost all of the costs caused by rising tariffs are borne by US importers, some tariffs have been passed on to US consumers, and the rest are absorbed by importers by reducing profit margins.

“The cross-border prices imported from China (before the tariff plus the pre-tax) have hardly changed, and the import price has risen sharply after the tariff increase, which is consistent with the tariff range,” the report said.

US President Trump said earlier this month that higher tariffs on Chinese goods “enriched the US Treasury” amounted to $100 billion. However, the IMF said that tariffs have led to a decline in US-China trade, but the bilateral trade deficit has remained basically unchanged.

The impact of trade wars on producers is more complicated, and US and Chinese producers affected by tariffs, as well as producers using these commodities as intermediate inputs, are potential losers.

In addition, the trade war has also negatively affected the stock prices of US producers who have significant participation in the Chinese market.

The report said: “Although the impact on global growth has been milder so far, recent escalation of tensions may seriously dampen commercial and financial market sentiment and disrupt global supply chains, thereby jeopardizing the expected recovery of global growth in 2019.”

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