U.S. Trade Commission Admits Tariffs Raised Prices for American Consumers
Tariffs raise prices.
That’s something that shouldn’t count as news, but sadly qualifies these days.
Five years after then-President Donald Trump declared a trade war with China and slapped new tariffs on steel and aluminum, the U.S. International Trade Commission (ITC) has found that those tariffs jacked up prices and reduced the availability of tariffed goods. In a report released Wednesday, the commission reported that American companies and consumers “bore nearly the full cost of these tariffs because import prices increased at the same rate as the tariffs.”
After investigating the consequences of both Trump’s Section 232 tariffs (the supposed “national security” levies against steel and aluminum) and his Section 301 tariffs (imposed against a wide range of items imported from China), the ITC reported that in both cases, domestic price increases matched the cost of the tariffs almost exactly. “The USITC estimated that prices increased by about 1 percent for each 1 percent increase in the tariffs,” the report states.
That’s pretty much the economics textbook explanation for how tariffs work. They raise prices on imports to give an advantage to domestic products. But whatever small benefits might accrue to those domestic producers are overwhelmed by the costs.
The ITC report bears that out.
The steel tariffs, for example, caused imports into the U.S. to fall by 24 perce
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