FRANKFURT, March 30 (Reuters) - U.S. consumers and importers take the vast majority of the financial hit from tariffs but trade volumes also suffer, resulting in a negative shock for exporters, too, a
ECB Study: US Consumers, Importers Bear Brunt of Tariff Costs
Main Findings of the ECB Economic Bulletin Article
Overview of Tariff Impact
FRANKFURT, March 30 (Reuters) - U.S. consumers and importers take the vast majority of the financial hit from tariffs but trade volumes also suffer, resulting in a negative shock for exporters, too, a European Central Bank Economic Bulletin article said on Monday.
The U.S. imposed a raft of tariffs on most trading partners last year and economists have been debating who would take the biggest hit after the Trump administration predicted that exporters would pay the cost.
Distribution of Tariff Costs
Impact on Exporters, Importers, and Consumers
"Exporters to the United States are absorbing only a small fraction of higher tariff-related costs," the ECB's study said. "Their costs are falling mostly on domestic importers and consumers."
Long-Term Effects on U.S. Consumers and Firms
The U.S. consumer now pays about a third of the cost and over the longer term, this share could rise to over half as U.S. firms exhaust their ability to absorb costs, the ECB said.
This implies that U.S. firms would absorb around 40% of higher tariff costs in the longer term, the article added.
Broader Economic Consequences
Impact on Trade Volumes and Exporters
But European exporters are not immune either as the estimated impact of tariffs on import volumes is large, the ECB predicted.
The paper said in the case of product categories that are still traded under tariffs, a 10% increase in the duties would result in a 4.3% decline in import volumes.
(Reporting by Balazs Koranyi; Editing by Jamie Freed)
