A new study by a group of economists found the trade war being waged by the White House has cost the economy in the U.S. $7.8 billion in lost gross domestic product last year.
According to Reuters, which cited the report by a team of economists at the University of California Berkeley, Columbia University, Yale University and University of California at Los Angeles (UCLA) and published by the National Bureau of Economic research, the team found imports from companies targeted with tariffs declined 31.5 percent in 2018. U.S. exports to those countries declined by 11 percent. The economists also found consumer and producer losses from higher costs of imports were $68.8 billion, noted the report.
The researchers said U.S. tariffs did benefit sectors in counties that are “politically competitive,” but that the tariffs in retaliation on U.S. goods offset any of the benefits. “We find that tradeable-sector workers in heavily Republican counties were the most negatively affected by the trade war,” the researchers said.
The hit to the U.S. economy due to President Trump’s tariffs comes as China and the U.S. may be nearing a truce on the tariff front. In early March The Wall Street Journal reported the two countries were gearing up to remove the tariffs, with a formal deal potentially happening at the end of the month. The paper noted at the time that there are roadblocks that could prevent a deal from being reached. The idea being talked about is the U.S. removing many of the sanctions on Chinese products while China would decrease restrictions and tariffs on some of the American goods. China would also remove limitations on foreign ownership of car ventures and cut tariffs on vehicle imports below 15 percent, where they stand now. Additionally, The Wall Street Journal reported at the time that China may increase purchases of goods from the United States.