Trade wars like America’s current dispute with China carry significant costs for ordinary people on both sides of the conflict, as tariffs drive up prices of imports and with them the cost of living. But precisely how much is the trade tussle with China costing Americans? Tw0 economists, Kirill Borusyak at University College London and Xavier Jaravel and at the London School of Economics, took on the task of tallying up the cost for an average American family and arrived at the figure of $460 per family, according to The New York Times.
- The researchers arrived at the figure by calculating the impact of tariffs across all goods and services, producing estimates based on detailed customs and supply chain data along with consumer expenditure data from 2015.
- The cost figure goes as high as $970 for high-income families, and as low as $340 for the poorest.
- The above figures strongly suggest that low-income households are the most heavily impacted by tariffs in proportional terms, since more affluent households tend to spend much less of their total income on day-to-day household needs.
- These figures don’t even account for tariffs on European, Canadian and Mexican trade partners, which add another $250 to the total cost.
- Meanwhile environmentalists are noting that there are some unexpected impacts elsewhere in the world: China’s decision to limit U.S. agricultural imports in retaliation for earlier tariffs has led to a soy bean boom in Brazil, which in turn is leading to the accelerated destruction of the Amazon rain forest by farmers clearing it for agricultural land.