Samantha Vortherms

Treasury Secretary Janet L. Yellen recently argued that tariffs from the U.S.-China trade war — covering more than $307 billion worth of goods — “hurt American consumers,” yet the negotiations “really didn’t address in many ways the fundamental problems we have with China.”

U.S. tariffs on Chinese exports jumped sixfold between 2018 and 2020, but tariffs failed to decouple the two economies. As the Biden administration conducts its comprehensive review of China trade policy and contemplates new tariffs, our research helps explain whether existing tariffs achieved their policy objective.

Tariffs increase the cost of doing business overseas by making those goods more expensive to import. The Trump administration’s logic was that tariffs would hurt U.S. and other multinational corporations engaged in U.S.-China trade — and push more companies to divest from China and shift supply chains to the United States. Tariff proponents argued the Chinese economy would suffer, giving U.S. negotiators more leverage over China at the negotiating table.

In fact, these tariffs resulted in collateral damage to the U.S. economy without pressuring China to change its economic policies. Here’s why.
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