US exporters hit by Trump’s import tariffs – Fed paper

US president Donald Trump’s import tariffs restrained growth in US exports due to global supply-chain spillovers, new Federal Reserve research finds.

Almost a quarter of US exporters relied on imported input goods that were subjected to tariffs, Kyle Handley, Fariha Kamal, and Ryan Monarch find.

From 2018 to 2019, Trump imposed a series of tariffs, which by August 2019 were levied on $290 billion of US imports. The authors examine the impact on US exporters over the two-year period using confidential product-level information from 2016 import data.

The exporting firms affected by the import tariffs accounted for more than 80% of US exports by value, and are larger than the average exporter, they find. Export growth was 2% lower for the average product surveyed in the last quarter of 2018, compared with the third quarter of 2019, they find.

“This is equivalent to an ad valorem tariff of almost two percentage points on US exports for mean exposure and almost 4% for product sectors one standard deviation above the mean,” the authors find.

Aggregate US export growth between the fourth quarter of 2018 and the third quarter of 2019 was flat, they say.  

“In practice, trade policy designed to avoid tariffs on consumer goods may disproportionately impact imported inputs, spilling over to affect exports of other products to third countries,” the authors write.