Economy

China Trade War Cost US $7.8 Billion Last Year

Douglas A. McIntyre

Published: March 19, 2019 6:30 am

Last Updated: January 11, 2020 9:53 am

The U.S. trade war with China has started to bite America financially. A new study shows the cost at $7.8 billion, as tariffs that could rise to as much as $250 billion take hold. The number is based on an analysis of import and export numbers.

The study was conducted by the National Bureau of Economic Research. It defined the loss based on retaliatory tariffs. The conclusions were derived from an analysis of imports from targeted countries, which dropped 31.5% among products that carry tariffs while targeted U.S. exports fell 11.0%.

The research conclusion was this: “After accounting for higher tariff revenue and gains to domestic producers from higher prices, the aggregate welfare loss was $7.8 billion (0.04% of GDP). U.S. tariffs favored sectors located in politically competitive counties, but retaliatory tariffs offset the benefits to these counties.”

The number is small compared to some other data. A study conducted by the American Auction Forum put the annual cost at $37.9 billion a year. That research looked at factors that “are directly responsible for inflation, depressed aggregate demand, less capital expenditures, and lower productivity levels.”

Yet another study from the consultancy Trade Partnership Worldwide took another view. It showed that the trade war with China would cost a million jobs.

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