A recent study published by the Centre for Economic Policy Research estimates that for every one percent increase in Chinese imports there is a 1.91 percent fall in prices. This decline in prices is enjoyed most of all by poor Americans (consistent with previous research) and amounts to approximately $400,000 in increased consumer surplus per job “lost” to trade with China.
In short, trade benefits the poor. Meanwhile, the poor are disproportionately harmed by tariffs. Unfortunately, the current administration buys wholeheartedly into the myths surrounding international trade, and in spite of the bluster about easy-to-win trade wars, the reality is much the opposite: our trading partners have increased their own tariffs on American goods, while simultaneously decreasing tariffs on one another; exports to China are down and the monthly trade deficit is up; and even protected industries are seeing job losses because most companies are not relocating to the United States, but instead to other Southeast Asian countries.
It’s way past time not just to end the trade war, but to eliminate tariffs entirely–even if no other countries do.
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