IMF: US firms paying tariff costs, not China

WASHINGTON: Companies in the United States are paying almost all the costs from President Donald Trump’s tariffs on Chinese imports, International Monetary Fund (IMF) researchers said in findings that dispute the president’s assertions that China is footing the bill.

IMF researchers found “tariff revenue collected has been borne almost entirely by US importers”, according to the IMF’s blog post released yesterday.

“Some of these tariffs have been passed on to US consumers, like those on washing machines, while others have been absorbed by importing firms through lower profit margins.”

The report concludes what most private economists have argued for months: that China doesn’t pay US tariffs, American consumers and companies do.

“Consumers in the US and China are unequivocally the losers from trade tensions,” said IMF.

It’s rare for the IMF to disagree with its largest shareholder, and the paper was released just as the rhetoric in Trump’s trade war with China reaches a boiling point.

Trade talks between Beijing and Washington stalled this month as Trump accused China of backing out of a deal that was taking shape.

In response, Trump increased levies on US$200 billion in Chinese imports to 25 per cent from 10 per cent, prompting retaliation from Beijing.

The US has also released a list of about US$300 billion in Chinese goods that could face additional tariffs, including clothing, toys and mobile phones.