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Tariff Case Studies

Explore real-world examples of how tariffs have impacted international trade, domestic industries, and consumer markets.

Case Study: U.S.-China Trade War (2018-2020)
Analysis of economic impacts from escalating tariffs between the world's two largest economies

Background

In 2018, the United States began imposing tariffs on Chinese goods, citing concerns about trade imbalances, intellectual property theft, and unfair trade practices. China responded with retaliatory tariffs, leading to an escalating trade conflict.

Tariff Measures

  • The U.S. imposed tariffs on $250+ billion of Chinese imports, with rates ranging from 10% to 25%
  • China retaliated with tariffs on $110+ billion of U.S. goods
  • Multiple rounds of escalation occurred before the "Phase One" trade deal in January 2020

Economic Impact

  • U.S. importers paid approximately $46 billion in additional tariffs (2018-2019)
  • U.S. agricultural exports to China fell by over 50% in 2018
  • Studies estimate U.S. GDP reduction of 0.3% and job losses of 300,000+
  • Consumer prices increased for tariffed goods in both countries
  • Some manufacturing shifted to other countries like Vietnam and Mexico

Key Lessons

This case demonstrates how tariffs can be used as geopolitical tools beyond their economic function. It also shows that in a globalized economy, tariffs often lead to complex supply chain adjustments rather than simple reshoring of production. The costs were largely borne by importing businesses and consumers rather than the targeted exporting country.

Case Study: Steel and Aluminum Tariffs (2018-Present)
Examination of sector-specific tariffs and their ripple effects across industries

Background

In March 2018, the United States imposed 25% tariffs on steel imports and 10% tariffs on aluminum imports from most countries, citing national security concerns under Section 232 of the Trade Expansion Act of 1962.

Tariff Implementation

  • Initially applied globally with temporary exemptions for some allies
  • Eventually, quotas or modified tariffs were negotiated with certain countries
  • Several countries filed WTO disputes and imposed retaliatory tariffs

Economic Impact

  • U.S. steel prices increased by 30-40% in the months following tariff implementation
  • U.S. steel industry added approximately 3,000 jobs
  • Downstream industries using steel and aluminum faced an estimated $5.6 billion in additional costs
  • Studies suggest each steel job created cost consumers over $900,000
  • Metal-intensive industries like automotive and construction faced increased input costs

Key Lessons

This case illustrates the trade-offs involved in using tariffs to protect specific industries. While the primary industry (steel production) saw some benefits, downstream industries that use steel as an input faced higher costs, potentially affecting their global competitiveness. It demonstrates how tariffs on intermediate goods can have cascading effects throughout supply chains.