A new study by a team of economists, entitled “Return to Protectionism,” finds that President Donald Trump’s trade policies over the past year cost the American economy $7.8 billion.
Protectionism refers to government actions and policies that limit international trade, usually with the goal of protecting local businesses and jobs from foreign competition.
Imports from targeted countries declined 31.5 percent, while targeted U.S. exports fell by 11 percent, according to economists from the University of California Berkeley, Columbia University, Yale University and University of California at Los Angeles.
They also found that annual consumer and producer losses from higher costs of imports totaled $68.8 billion. After factoring in higher tariff revenue and gains to domestic producers from higher prices, the net economic hit to the U.S. economy was $7.8 billion, according to the study.
The researchers noted that for more than half a century, the United States has led international efforts to reduce trade barriers. The return to protectionism in 2018 was “unprecedented” since the end of World War II, the study found.
The negative economic impacts are spread throughout the country, including “politically competitive counties for Republicans,” the study found.
“U.S. tariffs favored sectors located in politically competitive counties, but retaliatory tariffs offset the benefits to these counties,” according to the study.
The study included U.S. maps that illustrated regional impacts of Trump’s trade policies. The impact of tariff increases on U.S exports was particularly strong in much of the agricultural Great Plains, according to the study.
To see a summary of the study, visit www.nber.org/papers/w25638.pdf