The U.S. government collects about $40 billion in added revenue because of the tariffs imposed in the trade war with China. If you’re wondering who foots the bill, look in the mirror or down the street, but not to the Far East.
The New York Federal Reserve examined import/export data in dollar amounts as well as volume, and found that Chinese export prices to the U.S. remained stable since the tariffs were imposed. To account for the tariffs, prices would have to have fallen by 20%. Since they didn’t, it means importing American companies are eating the extra cost, consumers are paying higher prices, or some combination of the two.
But that doesn’t mean the tariffs haven’t hurt the Chinese.
The New York Fed also found that China’s share of U.S. imports of machinery and electrical equipment has fallen by around 2 percentage points since 2017, and its share of U.S. electronics imports has fallen by 6 percentage points.
That market share has gone largely to Europe and Japan for machinery and to Malaysia, South Korea, Taiwan, and Vietnam for electronics and electrical equipment.
Presumably, some of the market share was also picked up by American firms, but the study didn’t address that.