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Trade showdown

Who’s paying the tariffs on Chinese goods? A new report says it isn’t the Chinese

Mitchell Hartman Nov 25, 2019
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Chinese police officers watch a cargo ship at a port in Qingdao in China's eastern Shandong province in 2018. AFP via Getty Images
Trade showdown

Who’s paying the tariffs on Chinese goods? A new report says it isn’t the Chinese

Mitchell Hartman Nov 25, 2019
Chinese police officers watch a cargo ship at a port in Qingdao in China's eastern Shandong province in 2018. AFP via Getty Images
HTML EMBED:
COPY

A new report from the Federal Reserve Bank of New York finds that the cost of tariffs on Chinese imports is being borne primarily by buyers in the U.S., not Chinese sellers.

Federal Reserve economists analyzed import price data and found that Chinese exporters have not appreciably lowered their prices to absorb the cost of tariffs, which are now 25% on approximately $250 billion of imports from China.

Instead, Chinese companies have sacrificed market share to competitors in Asia and Europe that aren’t subject to tariffs.

Those tariffs, which the New York Fed report calls “a form of taxation,” are being paid by U.S. businesses (manufacturers, wholesalers and retailers) and consumers through higher prices.

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