Publications
Publications
- 2020
- HBS Working Paper Series
Tariff Passthrough at the Border and at the Store: Evidence from U.S. Trade Policy
By: Alberto Cavallo, Gita Gopinath, Brent Neiman and Jenny Tang
Abstract
We use micro data collected at the border and the store to characterize the price impact of recent US trade policy on importers, exporters, and consumers. At the border, import tariff passthrough is much higher than exchange rate passthrough. Chinese exporters did not lower their dollar prices by much, despite the recent appreciation of the dollar. By contrast, US exporters significantly lowered prices affected by foreign retaliatory tariffs. In US stores, the price impact is more limited, suggesting that retail margins have fallen. Our results imply that, so far, the tariffs' incidence has fallen in large part on US firms.
Keywords
Trade Policy; Tariffs; Exchange Rate Passthrough; Economics; Trade; Policy; Inflation and Deflation; United States; China
Citation
Cavallo, Alberto, Gita Gopinath, Brent Neiman, and Jenny Tang. "Tariff Passthrough at the Border and at the Store: Evidence from U.S. Trade Policy." NBER Working Paper Series, No. 26396, October 2019. (Revised June 2020. Harvard Business School Working Paper, No. 20-041, October 2019)
Supplemental Information
All the replication data and code are available in this Harvard Dataverse.