The U.S and China Trade War Hurting Unintended Targets: according to IMF study

An International Monetary Fund (IMF) study reported that the U.S. tariffs on Chinese products are hitting an unplanned target as the trade war increases in intensity. The study found that the tariff revenue gained from levies on Chinese goods “has been borne almost entirely” by U.S.-based importers.

The U.S. and China have been involved in a trade war for more than a year now. During this time, with the imposition of high import tariffs, they have targeted billions of dollars’ worth of goods.  But, “there was almost no change in the (ex-tariff) border prices of imports from China, and a sharp jump in the post-tariff import prices matching the magnitude of the tariff,” the study claimed.

Donald Trump has also indicated the chances of raising additional tariffs of $300 billion on Chinese goods. This, as per the IMF, could hit consumers as organizations are likely to pass on the added cost.

“Consumers in the US and China are unequivocally the losers from trade tensions.,” the IMF report stated, adding that higher tariff could hurt economic growth as well. “While the impact on global growth is relatively modest at this time, the latest escalation could significantly dent business and financial market sentiment, disrupt global supply chains, and jeopardize the projected recovery in global growth in 2019.” 

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