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“So China is now paying us billions in tariffs”

Here’s Economist Trump in 2018, quoted in Shy (2018). Now, from the USITC “The Economic Impact of Section 232 and Section 301 Tariffs on U.S. Industry” (p. 22), a conflicting assessment.

The Commission’s econometric model estimated that the Section 232 and Section 301 tariffs resulted in an almost one-for-one increase in the price of U.S. imports following the imposition of the tariffs. This means that an ad valorem tariff of 10% raises the price of US imports from China by about 10%. This almost complete pass-through (meaning that the price received by exporters is largely unaffected and the price paid by U.S. importers increases by the same amount as the tariff) is unusual, but similar findings have been found in other recent studies, which have concluded that US importers bear almost the entire burden of the Section 301 tariffs.

This is the estimated pass-through of tariffs to steel prices.

source: USITC (2023).

Estimates of tariff pass-through are very close to 1, ie a 25 percent ad valorem tariff leads to a real 25 percent increase in the price faced by domestic consumers (broadly defined).this means us is paying duties, no In both cases, the Chinese.

So, if you’re not paying attention, the US seems like a small country in terms of steel and aluminum markets (see Econbrowser post [1], [2], [3]– so against Comment by Mr. Bruce Hall).

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