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Trump's trade war to cost US economy $7.8 billion in 2018: study

Authors of the paper said they analysed the short-run impact of Trump's actions and found that imports from targeted countries declined 31.5 percent while targeted U.S. exports fell by 11 percent.

Reuters  |  WASHINGTON 

The cloud of the Russia investigation has hung over US President Donald Trump since before he took office, though he has denied any illicit connection to Moscow (Photo: Reuters)
Authors of the paper said they analysed the short-run impact of Trump's actions and found that imports from targeted countries declined 31.5 percent while targeted U.S. exports fell by 11 percent.

 Donald Trump's trade battles cost the U.S. economy $7.8 billion in lost in 2018, a study by a team of economists at leading American universities published this week showed.

Authors of the paper said they analysed the short-run impact of Trump's actions and found that imports from targeted countries declined 31.5 percent while targeted U.S. exports fell by 11 percent. They also found that annual consumer and losses from higher costs of imports totalled $68.8 billion.

"After accounting for higher tariff revenue and gains to domestic producers from higher prices, the aggregate welfare loss was $7.8 billion," or 0.04 percent of GDP, the researchers said.

The study was authored by a team of economists at the Berkeley, Columbia University, and at Los Angeles (UCLA) and published by the research. https://www.nber.org/papers/w25638

Having dubbed himself the "tariff man," Trump pledged on both the campaign trail and as to reduce the trade deficit by shutting out unfairly traded imports and renegotiating free trade agreements.

Trump has pursued a protectionist trade agenda to shield U.S. and have been locked in a tit-for-tat tariff battle for months as imposing unilateral tariffs to combat, and Trump has imposed tariffs that have roiled the and other major trading partners.

The authors said while U.S. tariffs favoured sectors located in "politically competitive" counties, the retaliatory tariffs imposed on U.S. goods have offset the benefits to these areas.

"We find that tradeable-sector workers in heavily Republican counties were the most negatively affected by the trade war," the researchers said.

 

First Published: Sat, March 16 2019. 08:12 IST
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