Who Pays for the Tariffs and Why? A Tale of Two Countries

Arbeitspapier

During the U.S.-China trade war, the U.S. punitive tariffs were almost entirely borne by U.S. importers. In contrast, only 68% of China's retaliatory tariffs were paid by Chinese importers. The puzzling difference between the U.S. and China is mainly driven by their different import structures and product heterogeneity in tariff pass-through. China mainly imported products with lower tariff pass-through from the U.S., such as agricultural products and aircraft, while the U.S. primarily imported products with higher tariff pass-through from China, such as electronics. Furthermore, we decompose the product-level tariff pass-through and show that a higher ratio of import demand elasticity over export supply elasticity leads to lower tariff pass-through under perfect competition.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 10497

Classification and Topics

• Classification: Wirtschaft ; Trade Policy; International Trade Organizations ; Empirical Studies of Trade ; Economic Impacts of Globalization: Microeconomic Impacts
• Subject: trade war ; tariff pass-through ; import structure ; product heterogeneity ; demand elasticity ; supply elasticity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Feng, Chaonan ; Han, Liyan ; Li, Lei
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/279247
• Last update: 10.03.2025, 11:43 AM CET