Trump’s strategy to use import tariffs to protect and boost US manufacturers backfired and led to job losses and higher prices, said Federal Reserve study.
“TARIFFS HAVE NOT INCREASED ACTIVITY IN MANUFACTURING SECTOR”
“We find that the 2018 tariffs are associated with relative reductions in manufacturing employment and relative increases in producer prices,” concluded Fed economists Aaron Flaaen and Justin Pierce, in an academic paper.
While the tariffs did reduce competition for some industries in the domestic US market, this was more than offset by the effects of rising input costs and retaliatory tariffs, the study found. “While the longer-term effects of the tariffs may differ from those that we estimate here, the results indicate that the tariffs, thus far, have not led to increased activity in the US manufacturing sector,” the study said.