Much of the cost burden that US businesses are bearing comes from Washington’s imposition of high tariffs amid the US-China trade war.
|US importers have to pay about 18.5% more of the price of Chinese goods subject to the 20% tariff. Photo: AFP|
According to a report released by credit rating and risk assessment company Moody’s Investors Service on May 17, US importers have shouldered more than 90% of costs due to Washington, under former US President Donald Trump, 20% tax on Chinese goods.
According to calculations by Moody’s Investors Service, US importers have to pay about 18.5% more of the price of Chinese goods subject to 20% tariffs, while the revenue collected by Chinese exporters also decreased by more than 1.5 % per product.
“Much of the cost of the tariffs has been placed on the shoulders of US importers,” Moody’s said in the report. If the trade war tariffs are maintained, pressure on US retailers is likely to increase, with a greater impact on consumer prices; at the same time affect more than half of US-China trade flows.
According to data from the Peterson Institute for International Economics, US tariffs on Chinese goods averaged 19.3%, trade-weighted in early 2021, while China’s tariffs on Chinese goods averaged 19.3%. America is about 20.7%.
Before US-China trade took place in early 2018, the average US tariff on Chinese goods was 3.1%, while China’s tariff on US goods was at 8%.
According to Moody’s, not only US importers, US exporters also “absorb” most of the cost of tariffs imposed by China.
The tariffs imposed by the Trump administration on China have harmed the US economy, but have not forced China to change its unfair trade practices, economists say.
US President Joe Biden has said he disagrees with the Trump administration’s policy on China, but Mr Biden is in no hurry to reverse the policies of his predecessor. Some observers say the tariffs could increase US influence over China.