Who actually paid for the US tariffs of 2018?
The tariffs were charged on imports from China, but the studies kept finding the bill arriving at American buyers. Here is the evidence and where it is contested.
▶ Start the storyMostly Americans, according to the main studies, though some of the evidence is still argued over. In 2018 the United States put tariffs of 30–50% on solar panels and washing machines and, in March, tariffs on steel (25%) and aluminum (10%), and it went on to escalate tariffs on Chinese goods. The administration's stated aim with China was to force changes to what the US called longstanding unfair trade practices and intellectual property theft, and the steel and aluminum tariffs were issued under a law allowing tariffs on imports that threaten to impair national security. A tariff is paid by the importer, and the economic burden falls on the importer, the exporter and the consumer in proportions that have to be measured.
The president also argued that China was paying. In November 2018 President Trump argued that the tariffs enriched the United States, saying it was gaining "Billions of Dollars" from tariffs charged to China. Fact-checkers and economists described the assertion as false: the Associated Press wrote that almost all economists say the president is wrong, because tariffs are taxes on imports that can cause higher prices and hurt overall growth.
The measurements pointed the same way. After the tariffs on Chinese goods, the prices of US intermediate goods rose by 10% to 30%, an amount generally equivalent to the size of the tariffs. A fall 2019 study found that by December 2018 the tariffs cost US consumers an additional $3.2 billion a month in added tax, plus $1.4 billion a month in deadweight losses. A study in the Quarterly Journal of Economics estimated that US consumers and firms that buy imports lost $51 billion, but that once government tariff revenue and gains to US producers were counted the net loss was $7.2 billion, 0.04% of GDP.
The 2018 tariffs: buyers' loss versus national net loss
US$ billion
| US$ billion | |
|---|---|
| Lost by US buyers | 51 US$ billion |
| Net US income loss | 7.2 US$ billion |
That last pair of numbers is the heart of the debate: a large bill for buyers, a small net loss for the country, because the money goes somewhere. Washing machines show how contested the details are: one study found washer prices rose around twelve percent, while an opinion piece in a trade magazine suggested the price spike had been temporary.
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Recap
The measured burden fell largely on US buyers, but studies disagree about its size for particular goods and about the net national effect.
💡 A trick to remember it · The tariff is a toll booth on your own road: the money goes to the treasury and the producers, the bill goes to the driver.
Surprising fact · In one major study, buyers lost $51 billion, but the net national loss was $7.2 billion.
Sources (3)
No source, no claim. Every fact in this lesson (25 claims) cites at least one of these.