According to Bloomberg article published on March 16, 2023, US importers bore almost the entire burden of tariffs that Donald Trump placed on more than $300 billion in Chinese goods during his presidency, raising costs for American companies, a report by an independent US government agency found.
The US International Trade Commission, a bipartisan entity that analyzes trade issues, found an almost one-to-one increase in the price of US imports following the so-called section 301 tariffs, it said in a report on Wednesday. The study came in response to a directive from Congress as part of a law passed last year.
The conclusions back the longtime assertion of US Chamber of Commerce and independent academic economists that the cost of the tariffs hurt American firms, and contradict Trump’s claim that China paid the ultimate cost of the duties.
The ITC’s commissioners weren’t all on the same page about the report, with Jason E. Kearns saying it painted an incomplete picture, as Bloomberg’s Eric Martin writes here.
President Joe Biden’s administration has kept the tariffs on imports of Chinese goods in place for more than two years and is currently undertaking a review of the duties to evaluate their effectiveness and decide if they should continue.
The tariffs were imposed by the Trump administration under section 301 of the Trade Act of 1974 starting in 2018 based on China’s alleged intellectual property theft and forced transfer technology.
Some of the findings in the 315-page report include the following:
- Prices for imports from China across some of the most affected industries — including imports of computer equipment, semiconductors, furniture and audio and video equipment — increased as much as 25% in 2021, according to the agency.
- In the same year, prices of US-produced goods in some industries rose 3% to 4%.
- Imports of the affected products from China declined to about $265 billion in 2021 from $311 billion in 2017, the year before the duties were imposed, the ITC said.
- Across all affected sectors, the duties lowered Chinese imports by 13% during 2018 to 2021, raised US output by 0.4% and increased prices of US products by 0.2%.
“It’s hardly news that tariffs are a tax paid by American families and companies, or that tariffs produce some winners and many losers across the US economy,” said John Murphy, senior vice president for international policy at the US Chamber of Commerce.
“What’s most frustrating is that the administration has provided almost no opening for tariff relief — even in instances where tariffs are clearly forcing US manufacturing offshore. It’s long past time to revisit these policies,” he said.
The US Trade Representative’s last year began a review of the tariffs, which would have started to automatically expire in the middle of last year absent an evaluation of their impact. USTR got hundreds of requests for the tariffs to continue and has kept them in place as it undertakes the review. The administration received thousands of public responses to a request for comment before the window to do so closed in mid-January.
“The administration is determining next steps on the section 301 tariffs and will take these relevant, but incomplete, findings into account,” said Adam Hodge, a spokesman for the USTR. “Our ongoing review will examine the effectiveness of the section 301 tariffs in addressing China’s unfair, harmful and anti-competitive acts, policies, and practices, as well as the impact on the US economy, including consumers.”
