Trump's trade war cost US economy $7.8 billion in 2018: study
US President Donald Trump’s trade war cost the US economy $7.8 billion in lost gross domestic product in 2018, according to a study by a team of economists at leading American universities.
Imports to the US from targeted countries declined 31.5 percent, while targeted US exports fell by 11 percent, according to the study, authored by a team of economists at the University of California Berkeley, Columbia University, Yale University and University of California at Los Angeles (UCLA).
Authors of the paper said they analyzed the short-run impact of Trump’s actions and found that annual consumer and producer losses from higher costs of imports totaled $68.8 billion.
“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 percent of GDP, the researchers said.
The authors said while US tariffs favored sectors located in “politically competitive” counties, the retaliatory tariffs imposed on US goods have offset the benefits to these areas.
“We find that tradeable-sector workers in heavily Republican counties were the most negatively affected by the trade war,” the researchers said.
Trump pledged during both his election campaign and as president to reduce the trade deficit by shutting out unfairly traded imports and renegotiating free trade agreements.
Trump has pursued a protectionist trade agenda to shield US manufacturing, part of his so-called America First policy.
The US and China have engaged in a tit-for-tat tariff war for months.
The Trump administration is demanding China make deep structural changes, including changes to how Beijing treats US companies and its own state-owned enterprises, and the deal is expected to require commitments on the Chinese currency and protections for American technology.
There have been conflicting comments out of Washington and Beijing about the likelihood of achieving a trade deal. A US diplomat in Beijing said last week that an agreement was not imminent.
Trump has also imposed tariffs that have roiled the European Union and other major trading partners.
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