As the European Union holds its breath as 18 May approaches, when President Donald Trump's decision on the car import report is expected to fall, American researchers are demonstrating the negative impact of Washington's tariff sanctions policy.
While Mr Trump does not seem to be abandoning his line, threatening China in recent days with new tariffs on his exports, European sources are nevertheless optimistic about Mr Trump's sentence on the report of the car investigation opened under section 232 of the Trade Expansion Act (see EUROPE 12195/1): customs duties seem to have lost favour across the Atlantic.
Several research institutes have recently examined the real impact on the US economy of tariffs on steel and aluminium, one year after their implementation. While steel producers seem to benefit a priori from this protection from competition, "It is American consumers or the firms that import the steel that are bearing the full costs of the tariffs", notes David Weinstein, a Columbia University researcher, in an episode of "Trade Talks", a podcast published by the Peterson Institute of International Economics. The exporters did not reduce their prices in response to the sanctions, but passed on the cost of the sanctions to the US operators, who therefore had to pay more for these products and in turn passed on this extra cost to consumers, thereby reducing their purchasing power.
In addition, producers traditionally subject to international competition have taken advantage of this opportunity to increase their profit margins, confirming the rise in prices for these products.
According to this study, the impact on U.S. real income would result in a loss of $1.4 billion per month - that is, for 35,000 jobs potentially saved, $200,000 per job.
Another study conducted by the Columbia Business School (CBS) confirms these observations and points out that the states benefiting from these sanctions are part of the "Rust Belt", often the "Swing states", key states for the elections, the study also highlights.
As for the states most affected by the rebalancing measures imposed by foreign powers, such as China and the EU, they would mainly affect the agricultural counties of the Midwest. "The heavily republican counties are the ones that bear the blunt of the trade war", concludes Amit Khandelwal of the CBS.
The resulting distributive consequences are significant transfers, between buyers of imported goods and consumers on the one hand, and metallurgical producers on the other, and between, on the one hand, the agricultural producing states, and the Rust Belt states on the other. (Original version in French by Hermine Donceel)