ITC Report Finds U.S. Importers - Not China - Paid Trump Administration Tariffs

On March 15, the U.S. International Trade Commission (ITC) released a report - mandated by Congress - rejecting former President Donald Trump's claims that China, rather than U.S. companies, paid the cost of over $300 billion worth of Chinese goods that his Administration levied tariffs on between 2018 and 2021.

Upon studying the economic impacts of the Section 301 tariffs levied on Chinese goods and the Section 232 'national security' tariffs imposed on steel and aluminum imports from around the world, the ITC found that, "U.S. importers bore nearly the full costs of these tariffs because import prices increased at the same rate as the tariffs."

Specifically, the ITC determined that import prices on goods increased by about 1% for each 1% increase in tariffs on those same goods. As a reminder, President Trump imposed a 25% duty on steel, a 10% duty on aluminum, and a 7.5% duty on Chinese goods.

Regularly throughout his presidency and on the campaign trail, President Trump had claimed that China would pay for the tariffs, including a false assertion during a debate with then-challenger Joe Biden that Chinese tariff payments had funded a $28 billion bailout package for farmers impacted by his trade war with China. 

The ITC was quick to note that its report should not be used to draw "broad conclusions" about the economic impacts from the tariffs. However, it is difficult to avoid noting the impact these trade policies had on increasing overall costs to consumers. Further, while the scope of the ITC's research was limited in some capacity, it also did not account for retaliatory tariffs that further harmed U.S. businesses aiming to export products to foreign markets.

Despite urging from businesses across the nation, the Biden Administration has not yet taken action to lift the duties imposed by the President's predecessor, though the Office of the U.S. Trade Representative is currently reviewing the tariffs, as well. The Biden Administration has, however, negotiated deals with the European Union, the United Kingdom, and Japan to replace 232 tariffs on steel and aluminum with quotas.

In terms of broad numbers, U.S. customs officials have collected over $173 billion in duties on Chinese goods since 2018. Another $12 billion and $3.6 billion in tariffs have been collected on steel and aluminum imports, respectively, since the start of these high-profile trade actions.

Reach out to the team at Constitution Partners with any questions you may have, particularly on trade actions may substantial impact to your business priorities.