Goldman Sachs said the cost of tariffs imposed by President Donald Trump last year against Chinese goods has fallen “entirely” on American businesses and households, with a greater impact on consumer prices than previously expected.
The bank said in a note that the trade war’s impact on U.S. consumer prices is now higher than previously expected, partly because Chinese exporters have not lowered their prices to better compete in the US market.
“One might have expected that Chinese exporters of tariff-affected goods would have to lower their prices somewhat to compete in the US market, sharing in the cost of the tariffs,” Goldman said.
“However, analysis at the extremely detailed item level in the two new studies shows no decline in the prices (exclusive of tariffs) of imported goods from China that faced tariffs.”
In addition, US producers have “opportunistically” hiked prices in response to protection from Chinese competitors, the bank said.