Who pays tariffs?


Mitsuo Shiota


May 13, 2019

On May 11, 2019, Japanese newspaper Nikkei reported that China pays most of the tariffs (Japanese).

I have checked how US import price from China changed from 2018 Q2, just before the first tranche “34b” became effective, for each HTS 10 digit code item, and compared the changes by tariff schedule category. I think the numbers disagree with the Nikkei report.

Update on 2019-05-15:

Most cited studies on this issue are “The Impact of the 2018 Trade War on U.S. Prices and Welfare” by Mary Amiti, Stephen J. Redding, David Weinstein (March 2019) and “The Return to Protectionism” by Pablo D. Fajgelbaum, Pinelopi K. Goldberg, Patrick J. Kennedy, and Amit K. Khandelwal” (March 2019). Both studies say US firms and consumers pay most of the tariffs.

The Nikkei report cites the EconPol paper “Who is Paying for the Trade War with China?” by Benedikt Zoller-Rydzek and Gabriel Felbermayr (November 2018), which says “In this analysis we show that, contrary to public opinion, the greatest share of the tariff burden falls not on American consumers or firms, but on Chinese exporters.”