President Trump’s various tariffs on imported goods are reducing American consumers’ income by about $1.4 billion a month, according to a new study by the London-based Center for Economic Policy Research.
The study found that the loss exactly mirrors the economic gains that consumers received under the North American Free Trade Agreement, the 1993 trade deal that Trump has sought to eliminate.
“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 economists Mary Amiti, Stephen Redding, and David Weinstein conclude in the paper published Saturday.
Trump has put tariffs of 25 percent on steel imports, 10 percent on aluminum, and 10-25 percent ones on $250 billion worth of Chinese goods, among other actions. The president has argued that the tariffs have protected domestic industries like steelmakers, forced trade partners to agree to negotiate better deals, and brought in enough money on their own to cover any economic harm.
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“The numbers are staggering. Billions of dollars, right now, are pouring into our Treasury,” Trump said at the Conservative Political Action Conference Sunday in Oxon Hill, Maryland.
The economists found that whatever gains the Treasury is enjoying are coming at the expense of regular people: “Our results imply that the tariff revenue the U.S. is now collecting is insufficient to compensate the losses being born by the consumers of imports.” The tariffs resulted in directly higher prices on imported goods and caused the prices of domestic products to rise as well. Imports of some products effectively ceased and U.S. producers responded to the reduced competition by raising their own prices, they noted.
