How much did Trump-era tariffs on China cost Americans? New US findings confirm ‘self-inflicted harm’

Trade tariffs against China may have spurred US firms into diversifying supply chains, but a commission’s findings suggest Washington has failed to achieve its main trade-war goal

US consumers are paying more for certain goods as a result of the tariffs, according to the US International Trade Commission

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The United States’ trade war with China dates back to 2018, and new findings reflect how Americans have been paying more because of it. Photo: EPA-EFE

Published: 12:00am, 17 Mar 2023Updated: 9:22am, 17 Mar 2023

Import tariffs placed on more than US$300 billion worth of Chinese goods during the Trump administration increased US prices, according to a report from a bipartisan US trade commission, confirming a widely held view among analysts of trade and tariffs that they caused “self-inflicted harm”.

The US International Trade Commission (USITC), an independent government agency that investigated the impact of the US-China trade war on America’s economy, said that prices for imports from China across some of the most affected industries – such as computer equipment, semiconductors, furniture, and audio and video equipment – rose by as much as 25 per cent in 2021.

While president in July 2018, Donald Trump announced a set of tariffs on Chinese goods, including semiconductors and chemicals, as Washington levied allegations of intellectual property theft and Beijing’s implementation of forced transfer technology – requiring foreign firms to share their tech in exchange for market access.

[US tariffs] haven’t pushed China to alter its underlying economic model, nor to address many of the structural impediments to business

Nick Marro, The Economist Intelligence Unit

The tariffs were imposed in 2018 and 2019, adding 7.5 to 25 per cent taxes on Chinese goods, but this led to the prices of US-produced goods in some industries increasing by 3 to 4 per cent, the report said.

“They haven’t pushed China to alter its underlying economic model, nor to address many of the structural impediments to business that foreign firms face in the Chinese market,” said Nick Marro, lead analyst in global trade with The Economist Intelligence Unit. “If anything, we’re seeing China double down on those policies now, given the pressure from things like US export controls.”

The “Economic Impact of Section 232 and 301 Tariffs on US Industries” report came in response to a directive from US Congress as part of a law passed last year.

The tariffs may have helped spur multinational corporations into supply-chain diversification and expand their presence in countries such as Vietnam and Malaysia, he added, but Washington has not achieved its core goal from the trade war.