New tariffs on Chinese goods increase costs for US households: study

NEW YORK - The latest round of US tariffs on Chinese goods will impose a total annual cost of $831 for a typical US household, according to a research posted Thursday on the Federal Reserve (Fed) Bank of New York's website.

The study was co-authored by Mary Amiti, assistant vice president in New York Fed's research and statistics group, Stephen Redding, professor in economics at Princeton University, and David Weinstein, professor of the Japanese economy at Columbia University.

According to the research, increased tariffs in 2018 imposed an annual cost of $419 for the typical US household, with an added tax burden for consumers and a deadweight or efficiency loss as the two components.

The study also found that a 10 percent tariff reduced import demand by 43 percent.

The researchers estimated that the annualized deadweight loss will increase to $620 per household with higher tariffs imposed.

"In sum, according to our estimates, these higher tariffs are likely to create large economic distortions and reduce US tariff revenues," according to the research.

Earlier this month, the United States increased additional tariffs on $200 billion worth of Chinese imports from 10 percent to 25 percent, and has threatened to raise tariffs on more Chinese imports.

In response to the new round of US protectionist moves, China has announced that it will raise additional tariffs on a range of US imports from June 1, and "will fight to the end."