Why haven’t Trump’s tariffs had more impact?

Steep import taxes have raised prices and affected US businesses, but not quite as much as expected. A new report offers some reasons, writes Ana Swanson from Washington

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Goods often take weeks to reach US ports, meaning the actual tariffs that companies paid rose more slowly than what the president announced throughout the year.

(NYT)

resident Donald Trump raised the taxes that the United States charges on imports last year to levels not seen in a century.

Prices of goods have increased as a result, and businesses that depend on imported products and supplies have struggled, with some closing their doors. Still, the effects have not been felt as strongly as some experts predicted after early April when Trump announced double-digit tariffs on imports from countries worldwide.

A new working paper from economists at Harvard University and the University of Chicago helps explain why. It shows that the tariff rate importers have paid is significantly lower than the tariff figures that Trump announced. The reasons include exemptions for certain countries and industries, rates that were lowered for some goods by the time they arrived in the US, and evasion of the rules by some companies.

By analysing the government's tariff revenue and the value of imports, the economists concluded that the actual US tariff rate was 14.1% at the end of September.

The figure is about half the tariff rate that the administration had officially announced. The average trade-weighted tariff rate for the United States was nominally 27.4% in September, the authors estimated, down from a peak of 32.8% in April.

“The actual tariffs are much lower than what were announced, and that is one of the reasons why the effects have not been as big as feared,’ said Gita Gopinath, a Harvard economist and former first deputy managing director of the International Monetary Fund.