Trump's Tariffs Cost the U.S. Economy $1.4 Billion Every Month

Tariffs imposed by President Donald Trump during 2018 cost the U.S. economy $6.9 billion last year—above and beyond the $12.3 billion paid by American consumers and importers to the federal government. That's the conclusion of a new economic analysis of the Trump trade war published this week by Centre for Economic Policy Research, a London-based think tank, by a trio of economists from the Federal Reserve Bank of New York, Princeton University, and Columbia University. The paper draws an important but sometimes ignored distinction between the cost of the tariffs as a form of taxation and the broader economic effects of raising barriers to trade. Americans are paying both those "seen" costs in the form of higher taxes, as well as the "unseen" spillover costs—known as "deadweight loss" in economist lingo—created by the tariffs. By the end of last year, after ramping up tariffs over the course of several months, the deadweight loss of Trump's tariffs totaled $1.4 billion each month, according to Mary Amiti, Stephen J. Redding, and David Weinstein, the three researchers. "We find that the U.S. tariffs were almost completely passed through into U.S. domestic prices, so that the entire incidence of the tariffs fell on domestic consumers and importers," they concluded...MORE