Research & Projects

Abstract

How did the import tariffs imposed during the 2018 U.S.–China trade war transmit to consumer prices, and what explains the heterogeneity of this transmission across sectors? While prior studies consistently document near-complete pass-through of tariffs to import prices at the border, evidence on retail prices is far more mixed. To address this pass-through puzzle, this paper systematically links U.S. CPI data to sector-level import tariff rates, thereby quantifying the average degree of pass-through to consumer prices and highlighting the underlying sources of heterogeneity across sectors. Using a newly constructed panel of monthly retail price indices across 15 consumption sectors and 14 metropolitan regions from 2015–2019, I merge CPI data with product-level tariff schedules through a multi-stage COICOP-HS concordance and estimate a difference-in-differences model with continuous treatment intensity.

I find that: (i) a 10-percentage-point increase in sector-level tariff exposure raised retail prices by about 3 percentage points, indicating incomplete but meaningful pass-through; (ii) sectors more reliant on Chinese imports faced larger price increases, though heterogeneity persists even among highly exposed sectors; and (iii) tariff transmission varies systematically with supply-chain position, consumer substitutability, and retail market structure. Together, this paper provides evidence that the trade war tariffs imposed measurable costs on U.S. households and offers a unified framework for understanding heterogeneous tariff transmission to consumer prices. Moving forward, effective trade policy should prioritize consumer welfare by accounting for downstream effects, ensuring that trade interventions support, rather than undermine, household well-being.

Abstract

Who ultimately bore the cost of the trade war tariffs? In this paper, we use unique barcode data to study the incidence of the 2018 US-China trade war. Instead of relying on aggregate import price data “at the port”, we focus on the response of prices measured “at the store”. We offer a more granular analysis using monthly retail price data from January 2017 to January 2020 for 9 categories of electronic products from 25 major U.S. retailers. We find clear and significant short-run increases in retail prices of vacuums and wearables, two sectors directly impacted by the initial tariffs implemented in September 2018. In the medium- to long-run, tariff pass-through is substantially mediated, reflecting substitution effects as consumers shift demand toward untariffed products and firms reconfigure sourcing strategies. Moreover, categories that were announced for tariffs but never ultimately implemented display higher pass-through than those that experienced tariff increases, highlighting the importance of anticipation effects and the inflationary nature of trade uncertainty in shaping price dynamics. Understanding these results is crucial not only for assessing the economic consequences of the tariffs but also for shedding light on how the burdens of such unprecedented trade measures are distributed.

Abstract

Do import protection tariffs actually revive U.S. manufacturing jobs? These policies are frequently promoted as a way to shield domestic workers from foreign competition, yet whether they delivered on this promise during the 2018–2019 U.S.–China trade war remains uncertain. This chapter constructs a state–industry–month panel from the Quarterly Census of Employment and Wages matched with industry–month tariff exposure to estimate the effect of tariffs on manufacturing employment. 

First, it estimates the average effect of tariffs on employment while controlling for retaliation and input-cost channels. 

Second, it explores regional heterogeneity: (i) by interacting tariffs with each state’s share of national manufacturing employment to test whether large Rust Belt states, which were central to the tariff rationale, saw stronger protection, and (ii) by interacting tariffs with local industry specialization to test whether states highly concentrated in targeted industries, such as steel experienced differential effects. 

Finally, it traces the mechanism by linking tariffs to state–industry imports to evaluate whether protection worked through the mechanism policymakers promised. 

Together, the findings provide a transparent test of whether tariffs delivered on their central promise of reviving U.S. manufacturing jobs.