Tariff Pass-Through at the Border and at the Store: Evidence from US Trade Policy

TLDR

The study aims to characterize the price impact of recent U.S. trade policy on importers, exporters, and consumers using microdata collected at the border and the store. The authors analyze border and store microdata to assess how tariffs affect prices for importers, exporters, and consumers. At the border, import tariff pass‑through exceeds exchange‑rate pass‑through; Chinese exporters barely lowered dollar prices despite dollar appreciation, while U.S.

Abstract

We use microdata 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 pass-through is much higher than exchange rate pass-through. 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. (JEL E31, F13, F14, F31, L11)