Import Tariffs can also Reduce Exports (VIDEO)
Heinz College, Carnegie Mellon University
Excerpt from webinar with Lee Branstetter, Professor of Economics and Public Policy, Heinz College, Carnegie Mellon University, October 2, 2018. In collaboration between EconoFact and The Hamilton Project, Brookings.
The Issue:The Trump administration has imposed tariffs on imports from many other countries including on washing machines, solar panels, steel, and aluminum, as well as on a broad swath of goods imported from China. In addition, it is considering imposing tariffs on imported cars and automobile parts. In the crosshairs of the administration: the U.S. trade deficit, which the administration has argued is the result of unfair trading and stood at $566 billion in 2017.
But tariffs on imports can have a negative impact on exports--and not just because of retaliation from the U.S.'s trading partners.
What this Means:
Trade protection, in the form of tariffs and non-tariff barriers, imposes a cost on consumers by limiting the variety of goods and services available and by raising the price of imports. What is less broadly understood is that when a country imposes import tariffs this can also make its own exports more expensive and less competitive in world markets.