According to the new data, it’s not China but the American consumers and business that are bearing the financial burden of the trade war by President Trump, subverting Trump’s assertion that China is paying a hell of taxes to the United States.
A Federal Reserve Bank of New York’s economist, Mary Amiti, wrote in a working paper of the National Bureau of Economic Research that U.S consumers and businesses continue to bear the burden of U.S tariffs almost completely. Stephen J. Redding of Princeton University and David E. Weinstein of Columbia University were the other two authors of the research paper.
While the authors examined the data of the tariffs fallout through October, it was found that the levies were continuously being paid by the Americans, as it increased over the year’s course. The paper is an updated version of the previous research and it showed that almost 100 percent of the import taxes were being paid by the American consumers.
It is evident from the Trump is using tariffs to turn the trade in the US’s favor by rewriting its terms, the cost of which is being paid by the American businesses.
The economists are attributing the constant manufacturing downfall to the uncertainty that has stemmed from the trade war. Moreover, the investment business is suffering as the corporate executives are perplexed as to how will the tensions end, or whether they will even end at all or not.
An initial deal between the United States and China is expected to be signed this month as the two countries have reached an apparent ceasefire. Taxes on Chinese goods, worth $360 billion, are to stay.
While the US, as said by Trump and his supporters, had only one choice of using harsh tactics in forcing China to stop behaving unfairly economically. And it has been continually asserted by the president Trump, incorrectly, that not the American businesses, but China, is paying the tariffs.