The U.S. Customs and Border Patrol is on pace to collect more than $72 billion in import duties as a result of U.S. tariffs so far this year. An oft-repeated claim is that China is paying the cost of these new duties. But we have data showing exactly who is paying–U.S. businesses and households.
Researchers at Harvard University, the University of Chicago and the Federal Reserve studied data collected from U.S. Customs and retailers to determine where the cost of the tariffs is really landing. Are exporters lowering their prices to compensate for tariffs or are businesses and households in the United States experiencing higher costs?
“We find little difference in the ‘at-the-dock’ ex-tariff price levels and stickiness for otherwise equivalent goods that were affected and not affected,” the report found. “This nearly complete pass through of tariffs to the total price paid by importers suggests the tariff incidence has fallen largely on the U.S.”
Earlier this year, RSM conducted a similar study of data collected from the CBP. The graphic below illustrates what we found: There is zero evidence that Chinese exporters have lowered prices in response to the tariffs; the full cost is being transferred to U.S. businesses and households.