The results of a study that was conducted by a team of economists at leading American universities which was published earlier this week showed that the United States economy lost out on $7.8 billion in lost gross domestic product in 2018 because of the trade battles initiated by the US President Donald Trump.
In the research work, authors conducted an investigation into the impact of the actions by Trump in the short term and concluded that there had been a decline of 31.5 per cent in imports of US goods into targeted countries. There was also a total loss of $68.8 billion to the US economy because of lower expenditure in the year by consumers and producers because of the higher costs of imports resulting from increase in import tariffs imposed by the Trump administration.
"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 per cent of GDP, the researchers said.
The study which was published by the National Bureau of Economic Research was authored by a team of economists at the University of California Berkeley, Columbia University, Yale University and University of California at Los Angeles (UCLA).
Coming to be dubbed as the "tariff man" because of his solution of imposing higher tariffs to solve trade issues, Trump had promised during both the campaign trail for the Presidential elections as well as after assuming office as president bringing down of the trade deficit by preventing those imports into the US that were made in an unfair manner and then by renegotiation of the free trade agreements.
According to the arguments in favour of the imposition of tariffs, Trump had said that the protectionist stance to on trade that he had taken was intended to protect the future of the manufacturing industry of the US.
As a part of that strategy, the US and China have been embroiled in an acrimonious trade war for more than 7 months now with both sides imposing high import tariffs on each others’ goods worth billions of dollars. Trump has alleged that the trade policies followed by China were unethical and were intended to prevent US companies from doing business in China. He has also alleged that the trade practices of China involved forced transfer of technology by US companies to local Chinese companies through joint ventures, providing unfair government subsidies to Chinese companies and theft of American intellectual property. The tariffs imposed by Trump have not even excluded the traditional and major trade partners such as those in the European Union.
While the imposition of import tariffs by the Trump administration has benefited some of the industries that are located in "politically competitive" counties, such benefits in those areas have been offset by the retaliatory tariffs imposed on U.S. goods, said the authors of the study.
"We find that tradeable-sector workers in heavily Republican counties were the most negatively affected by the trade war," the researchers said.
(Source:www.business-standard.com)
In the research work, authors conducted an investigation into the impact of the actions by Trump in the short term and concluded that there had been a decline of 31.5 per cent in imports of US goods into targeted countries. There was also a total loss of $68.8 billion to the US economy because of lower expenditure in the year by consumers and producers because of the higher costs of imports resulting from increase in import tariffs imposed by the Trump administration.
"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 per cent of GDP, the researchers said.
The study which was published by the National Bureau of Economic Research was authored by a team of economists at the University of California Berkeley, Columbia University, Yale University and University of California at Los Angeles (UCLA).
Coming to be dubbed as the "tariff man" because of his solution of imposing higher tariffs to solve trade issues, Trump had promised during both the campaign trail for the Presidential elections as well as after assuming office as president bringing down of the trade deficit by preventing those imports into the US that were made in an unfair manner and then by renegotiation of the free trade agreements.
According to the arguments in favour of the imposition of tariffs, Trump had said that the protectionist stance to on trade that he had taken was intended to protect the future of the manufacturing industry of the US.
As a part of that strategy, the US and China have been embroiled in an acrimonious trade war for more than 7 months now with both sides imposing high import tariffs on each others’ goods worth billions of dollars. Trump has alleged that the trade policies followed by China were unethical and were intended to prevent US companies from doing business in China. He has also alleged that the trade practices of China involved forced transfer of technology by US companies to local Chinese companies through joint ventures, providing unfair government subsidies to Chinese companies and theft of American intellectual property. The tariffs imposed by Trump have not even excluded the traditional and major trade partners such as those in the European Union.
While the imposition of import tariffs by the Trump administration has benefited some of the industries that are located in "politically competitive" counties, such benefits in those areas have been offset by the retaliatory tariffs imposed on U.S. goods, said the authors of the study.
"We find that tradeable-sector workers in heavily Republican counties were the most negatively affected by the trade war," the researchers said.
(Source:www.business-standard.com)
