GENEVA, Nov 6:Consumers in the United States are bearing the brunt of the US additional tariffs against China since mid-2018, shows a study of the United Nations Conference on Trade and Development (UNCTAD).
In a paper titled “Trade and trade diversion effects of United States tariffs on China” released on Tuesday, the UNCTAD warns that additional tariffs imposed by the United States on China, especially in July and September 2018, are economically hurting both countries.
“The ongoing US-China trade war has resulted in a sharp decline in bilateral trade, higher prices for consumers and trade diversion effects,” says the paper.
The study finds that consumers in the United States bear the heaviest blow of the U.S. tariffs on China, as the “associated costs have largely been passed down” to American consumers and importing firms in the form of higher prices.
Meanwhile, it also finds that Chinese firms have recently started absorbing part of the costs of the tariffs by reducing the prices of their exports.
It warns that the escalation of tariffs in the summer of 2019 is likely to have added to the existing losses.
“The results of the study serve as a global warning. A lose-lose trade war is not only harming the main contenders, it also compromises the stability of the global economy and future growth,” cautioned Pamela Coke Hamilton, the UNCTAD’s director of international trade and commodities.
“We hope a potential trade agreement between the U.S. and China can de-escalate trade tensions,” she said.
(AGENCIES)
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