Tariff Passthrough at the Border and at the Store: Evidence from US Trade Policy Tariff Passthrough at the Border and at the Store: Evidence from US Trade Policy

By Alberto Cavallo, Gita Gopinath, Brent Neiman, and Jenny Tang

Beginning in 2018, the United States has made many significant changes to its trade policies. The most notable change has been the imposition of tariffs ranging from 10 to 50 percent on imported goods such as washing machines, solar panels, aluminum, steel, and on roughly $250 billion worth of goods from China. Future tariffs have been announced on an additional $300 billion of Chinese goods. Canada, China, the European Union, and Mexico have responded to these policies by imposing retaliatory tariffs on US goods. Not since the 1920s have the world’s largest economies enacted measures that make it far more costly to buy products from each other. This paper uses product-level price data from the Bureau of Labor Statistics and online price data on millions of individual goods from two large multi-channel US retailers to gauge the impact that these trade policies have had on prices measured at the US border and at the US retail level.

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