Recent trade wars at the hands of US President Donald Trump against other countries have resulted in a GDP loss of $7.8 billion for the American economy, according to a recent study published by economists.
According to a paper published this week by the National Bureau of Economic Research authored by economists at the University of California Berkeley, Columbia University, Yale University and the University of California at Los Angeles, imports from trading countries including China have declined 31.5 percent while US exports have decreased 11 percent. In addition, “annual consumer and producer losses from higher costs of imports were $68.6 billion” last year, the report states.
“US tariffs favored sectors located in politically competitive [US] counties, but retaliatory tariffs offset the benefits to these counties. We find that tradeable-sector workers in heavily Republican counties were the most negatively affected by the trade war,” the authors wrote in the report.
China and the United States have been engaged in a trade war since Trump announced in June that the US would subject $50 billion worth of Chinese goods to 25 percent tariffs in a bid to modify the US-Chinese trade deficit. The two countries have since exchanged several rounds of trade tariffs. Although Washington and Beijing have held off on introducing new tariffs since the December 2018 G20 summit in Argentina, multiple trade consultations have yet to resolve the dispute.
Trump, who has verbally attacked the European Union over farm policies and agricultural tariffs, has claimed that he will decide by mid-May whether to impose additional duties on car and part imports from the bloc. Such a move, which could hit $60 billion in annual EU exports, would trigger immediate retaliation from Brussels, officials have said, Sputnik previously reported.
In July 2018, Trump and European Commission President Jean-Claude Juncker agreed to work toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods. They also agreed to increase trade in chemicals, pharmaceuticals, medical products and soybeans.
Prior to striking the deal, the US and the EU were locked in what appeared to be an escalating trade war after the Trump administration imposed tariffs on steel and aluminium imported from the bloc, as well as those from Canada and Mexico. The EU retaliated by levying tariffs on over $3.2 billion worth of the US imports. Both sides also threatened to impose reciprocal tariffs on automobiles, agricultural and high-tech goods.