President Joe Biden’s decision to raise tariffs on selected goods from China, impacting roughly $18 billion worth of imports, is expected to stir conflict within supply chains over who will bear the cost. This move has significant implications for the U.S. economy and inflation, the Wall Street Journal reports. The issue is also becoming a focal point in the presidential campaign, with Biden and rival Donald Trump both emphasizing their trade policies.
Evidence indicates the tariffs initially imposed by Trump and maintained by Biden were largely absorbed by American buyers. Studies show prices for consumers only increased slightly for goods subject to tariffs, suggesting that importers and wholesalers took on much of the cost. However, a broader, across-the-board tariff could be more expensive. Domestic suppliers might raise their prices due to reduced competition, while businesses and consumers might struggle to find alternatives.
