Peterson Institute
@PIIE
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The Peterson Institute for International Economics is a nonpartisan, independent research institution devoted to studying international economic policy.
Joined March 2009
🚨CHART UPDATE🚨.On average. US tariffs on China are now 51.1%.China tariffs on the US are now 32.6%. US tariffs on rest of the world are 11.7%.China tariffs on rest of the world are 6.5%
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25% tariffs on Canada & Mexico would cause lower GDP & higher inflation than otherwise in all three countries, including the US—& the damage would be even worse if Canada & Mexico retaliate. Learn more:
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There's been a lot going on in the trade war with China. We've been tracking all the drama with our Trade War Timeline:
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1/ We want to respond to @SecretaryRoss interview about steel and aluminum tariffs with @ErinBurnett on @CNN and to some claims he made about us @PIIE.
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25% tariffs on Mexico & Canada + the 10% tariffs that are already in effect on China, could cost the typical American household more than $1,200 per year—& this analysis doesn't include the additional 10% on China recently announced. #PIIECharts.More:
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Trump HAS gotten China to lower its tariffs. on everyone else. China has increased tariffs on US exports to an average 20.7%. But China has also *reduced* tariffs on competing products imported from everyone else to an average of only 6.7%.
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“This is going to be much bigger than Smoot-Hawley,” @D_A_Irwin says. “Imports are a much greater share of GDP now than they were back in the early 1930s by a long shot.” Imports of goods & services are 14% of US GDP — ~3x the share they were in 1930.
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reminder that the experts learned about the new tariff rates the same time you did. pls be nice to us, we are analyzing as fast as we can.
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NEW: Former President Trump recently mused that he might impose even higher tariffs than earlier proposed. A 20% across-the-board tariff + 60% tariff on China would cost a typical US household more than $2,600 a year, up from the $1,700 if it was 10%. #PIIECharts
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|￣￣￣￣￣￣￣￣￣￣￣|.| Breathe, check facts |.| before sharing info, & |.| care of yourself |.|＿___＿＿＿＿＿＿＿＿| . \ (•◡•) / . \ / . ---. | |.
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Here are the imports from Mexico & Canada that will be hit the hardest by the 25% tariffs. From Mexico: transport equipment, fruits & vegetables, electronics, & machinery.From Canada: wood products, metals, fuels, food products, & transport equipment.#PIIECharts
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the economist urge to ask a question that's more of a comment.
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Since the enactment of the CHIPS Act, the US has been on track to add more construction for computer & electronics manufacturing in 2024 alone than it did during the 20 years before the Act. #PIIECharts.Learn more:
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US special protection covers 50.6% of all US imports from China. If Trump follows through on his latest threat of 25% tariffs on $300 billion of imports, US special protection will cover *96.7%* of US imports from China. By @ChadBown & @EvaYZhang:.
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Whatever President Trump may have said about guarding national security or creating steel jobs, the tariffs were never about military strength or American workers. Their purpose was to enrich steel firms. They succeeded—but at an exorbitant price.
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New PIIE analysis shows if Trump moves forward with his proposed tariffs on imported autos and parts, 195,000 US workers would lose their jobs and the American auto industry would shed nearly 2% of its workforce.
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Updated stats:.US tariffs on Chinese exports: 104.3%.Chinese tariffs on US exports: 106.6%. US tariffs on rest of the world exports: 15.7%.Chinese tariffs on rest of the world exports: 6.5% . 100% of trade flowing between the world's two largest countries is subject to tariffs.
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In comparison to the US & eurozone, @AdamPosen says the UK is suffering the additional problems of Brexit, a loss of credibility of economic governance, & the legacy of under-investment in public health & transport services. “It’s not good.".
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Since the start of President Trump's trade war, China has retaliated against US tariffs by raising tariffs on US goods. Less well known is that China has also been lowering rates for everyone else. #PIIECharts
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Trump's tariffs are designed for maximum damage—to America—and will not even accomplish the goal of balanced American trade.
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Almost all of Trump’s economic proposals would reduce supplies of labor, industrial inputs, consumer goods, & federal tax revenues, while spurring huge federal deficits, writes @AdamPosen:
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Trump said Democrats have given us “some of the worst trade deals in World History.” But… #PIIECharts
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Trump’s policy of economic nationalism has made the United States less attractive for long-term business commitments. By @AdamPosen
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We are once again reminding you that tariffs are taxes & Trump's proposed 20% across-the-board tariff plus 60% on imports from China would cost a typical household over $2,600 per year. #PIIECharts .Details:
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25% tariffs on Mexico & Canada, + the 10% tariffs that are already in effect on China, could cost the typical American household more than $1,200 per year. #PIIECharts
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The idea that making everything domestically builds resiliency is what @AdamPosen calls "the fallacy of self-sufficiency" & it has repeatedly been disproven. It is having diversified supply chains—including geographically—that builds resilience. Read more:
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NEW: Globalization has been a big topic in the news lately. But what IS globalization? How does it actually affect American businesses, workers, and consumers? Find out in our guide that explains all sides of this complicated topic.
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Tariffs are associated with increasing trade deficits. Read more:
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Here are the imports from Mexico & Canada that will be hit the hardest by the 25% tariffs. From Mexico: transport equipment, fruits & vegetables, electronics, & machinery.From Canada: wood products, metals, fuels, food products, & transport equipment.#PIIECharts
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We are excited to announce Cecilia Malmström (@MalmstromEU) is joining the Peterson Institute as a Nonresident Senior Fellow! Cecilia will also be a host of our virtual discussion series Trade Winds. Welcome Cecilia! 🎉 📈.
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12/ @PIIE strives to provide rigorous, intellectually honest, nonpartisan research. We post our data so results can be replicated. We maintain independence from funders, who are disclosed & have no say in results. Happy to stand on our record & debate @SecretaryRoss on the facts.
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2/ Here is the PIIE study @ErinBurnett referenced on @CNN showing that a past US tariff on Chinese tires saved 1,200 jobs, but cost 3,700 retail jobs. US consumers paid $900,000 per job saved. Data calculations available for replication.
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Trade wars are not zero-sum games. and the markets show why 👀 👇.
Here is the market response. US & Chinese stocks tend to move in the same direction following @realDonaldTrump’s China-trade-related tweets, suggesting the trade war is not zero-sum (good for US, bad for China) @ojblanchard1 @PIIE
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Maurice Obstfeld has a surplus with his textbook publisher because he's better at writing textbooks & they're better at distribution. But he has a deficit with his ophthalmic surgeon instead of trying to remove cataracts himself. That's how deficits work.
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International economic policymaking is complicated. To help you understand, we put together this (noncomprehensive) map showing the relationship between some US & EU government bodies & international institutions. Details & glossary:
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NEW: The Trump admin is embarking on an economic equivalent of the Vietnam War—war of choice that will soon result in a quagmire, undermining faith at home & abroad in trustworthiness & competence of the US—& we all know how that turned out. By @AdamPosen:
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We know you've been waiting for it, #EconTwitter, and here it is: Larry Summers, Emmanuel Saez, and Greg Mankiw discussing wealth taxes. #Inequality2019 .
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The global semiconductor production system is complex, integrated, & difficult to disentangle. Each of the five major global semiconductor producers—China, South Korea, Japan, Taiwan, & the US—is also a large chip importer. #PIIECharts.Learn more:
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The drop in federal R&D funding is one of the key drivers behind declines in US productivity growth, @baselinescene tells @WSJ. Overall federal R&D spending, at 0.7% of GDP, is roughly half what it was in the mid-1980s.
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Where do tariff rates stand *right now*? . US tariffs on exports from China are around 42%. US tariffs on exports from the rest of the world are almost 4%. #PIIECharts. Learn more:
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3/ WTO rules allow tariffs in select cases. US protections already exist for steel—it’s why only 3% of US steel imports are from China. The new tariffs will raise costs for US auto, other manufacturers, where 40x more Americans work than in steel mills.
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25% tariffs on Canada & Mexico would cause lower GDP & higher inflation than otherwise in all three countries, including the US—& these estimates do not include retaliation. Learn more:
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Tariffs are associated with increasing trade deficits. Read more:
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4/ Tariffs are no free lunch. US will lose market share in autos and manufactures, raise prices for our consumers, and other countries may retaliate, destroying other jobs. Instead, the US should mobilize allies to pressure China to reform.
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There is no economic upside to Brexit, says @AdamPosen. Hear more of his views on the deal: #Brexit
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7/ Bigger question: Why is Trump Admin using bilateral surpluses as measure of success? Normal in trade to have deficits w/ some countries. Trade deficits go up in good economic times. Mexico’s surplus in ’94-’95 grew as its economy crashed. Not worth it.
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10) He did say that @PIIE, we are “dyed in the wool free traders.” That much is true. And we are proud of it. #dyedinthewoolfreetrader because it works.
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If Trump's threatened 25% tariffs on Canada & Mexico went into effect, the largest flows affected would be transportation equipment & machinery, as well as electronics, some manufacturing, & fuel. Current tariffs on goods imported from the USMCA partners are generally below 1%.
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Good morning Twitter. Remember that an annualized rate means the economy would be growing by 33.1% if it was growing at the same rate for four quarters. But since that's not happening, the 2020 Q3 economy grew by about 7.4% compared to 2020 Q2.
The U.S. economy grew at an annual rate of 33.1% in Q3.
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NEW: Economic inequality is bad. This just-published feature explains what drives inequality & how government policy left millions vulnerable to COVID-19, but also how policy, done right, can mitigate the growing gap between the rich & the poor.
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With respect, Senator Hawley, the claims you made in the original op-ed and in this thread are misleading. The WTO isn’t perfect, but there are lots of ways to make the global trading system better without abandoning the system entirely. Our own thread. .
THREAD/ A few points in response. 1. My basic claim is that to confront #China economic imperialism & protect American security & Econ interests, the international system must be reformed. That includes the global economic system.
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JUST IN: @jasonfurman & Wilson Powell III calculate the realistic unemployment rate is 8.2%, higher than the official figure of 6.2%.
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ok, well. nvm.
Updated stats:.US tariffs on Chinese exports: 104.3%.Chinese tariffs on US exports: 106.6%. US tariffs on rest of the world exports: 15.7%.Chinese tariffs on rest of the world exports: 6.5% . 100% of trade flowing between the world's two largest countries is subject to tariffs.
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NEW: Presidential candidate Trump's proposals would reduce US reliance on income taxes while increasing reliance on import tariffs. Lower- & middle-income Americans would shoulder increased tax burdens; only upper-income earners would experience net tax cuts. #PIIECharts
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Americans’ misplaced optimism about social mobility makes them less likely to support tax and spending programs to help the poor, @S_Stantcheva finds. Watch here:
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10/ Since WWII, US has led global rules-based economic system that’s fostered prosperity, prevented trade wars, let alone military conflict. Study after study shows the benefits of the system for all parties. The US is leader with benefits, not victim.
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.@AdamPosen responded to a letter from @SenWarren, writing that "leaving the post of Vice Chair for Supervision unoccupied presents real & present risks to financial stability & therefore the economic well-being of all Americans." 👇.
Economic Experts: Rapid Confirmation of Fed Vice Chair for Supervision is Key to Preserving Financial Stability .I am one of those. Given high inflation, rising rates, Russian threats, and fintech, delaying the appointment puts the US economy in danger.
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We updated the chart. Average US tariffs on China are now 104.3%. Average China tariffs on the US are now 106.6%. 100% of goods flowing between the world's two largest economies are now subject to tariffs. Details & data here:
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We have another update. As of April 11, on average:. US tariffs on China are now 134.7% .China tariffs on the US are now 147.6%. US tariffs on rest of the world are 10.5% .China tariffs on rest of the world are 6.5%
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NEW: The US has decreased its dependence on China for all types of imported manufactured goods since 2018. The EU & China, however, have maintained or increased their reliance on each other for almost all types of imported goods. Read more:
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11/ Technology far bigger factor than trade in which jobs are created/lost, so must prepare ALL workers for the future—not just give handouts to special interests. Investment, retraining, tax credits will help workers succeed. 95% of world’s potential customers live outside US.
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|￣￣￣￣￣￣￣￣|.| US withdrawal |.| from the WTO |.| would be |.| a mistake |.| ＿＿＿＿＿_____|.(\__/) ||.(•ㅅ•) ||./ づ.
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5/ Yes, PIIE forecast for trade surplus following #NAFTA was wrong because we did not foresee collapse in Mexican investment/growth in ‘94-95. Was mistake to try to precisely forecast that or net job creation. We learned from our analytical mistakes 25 years ago.
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Abenomics has been a revolutionary policy, @AdamPosen says. "Mr. Abe was able to demonstrate that a democratically elected leader could take on special interests, look to the long term instead of just reacting to the short term, & still get reelected.".
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On average, US tariffs on China are now 51.1%. Average Chinese tariffs on the US are now 32.6%. #PIIECharts. Learn more:
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New Chinese data imply that foreign firms operating in China are not only declining to reinvest their earnings but—for the first time ever—they are large net sellers of their existing investments to Chinese companies & repatriating the funds. Read here:
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President Trump has praised tariffs as a “great revenue producer for the US government. In reality, tariff revenue has not been a major source of government revenue since 1914. #PIIECharts.
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Many economists have opinions about the "Washington Consensus"—it raises red flags to some while providing enduring wisdom to others. So what is it?.A list of 10 policy recommendations from John Williamson that took on a life of its own. Learn more here:
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Almost all of Trump’s economic proposals would reduce supplies of labor, industrial inputs, consumer goods, & federal tax revenues, while spurring huge federal deficits, writes @AdamPosen:
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In 1960, South Korea’s exports were ~1% of GDP & the country’s ability to import depended mostly on US aid. After changing its foreign exchange & trade policies in the mid-1960s, Korea saw a surge in exports to more than 10% of GDP by the end of the decade.
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The latest installment of #PIIECharts by @ojblanchard1 & Ben Bernanke illustrates the main components fueling the decline in inflation in the US & EU, building on previous research indicating strong price shocks help to explain most of the increase & later decrease.
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Even with the phase one deal, US tariffs on imports from China are more than six times what they were before the trade war started in 2018. #PIIECharts
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Our modelling of 25% tariffs on the EU shows that such tariffs would backfire on the US, pushing up prices & slowing economic growth. That’s before likely EU retaliation. And it would likely have little impact on the global US trade deficit.
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If Trump's threatened 25% tariffs on Canada & Mexico went into effect, the largest flows affected would be transportation equipment & machinery, as well as electronics, some manufacturing, & fuel. Current tariffs on goods imported from the USMCA partners are generally below 1%.
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Net revenue gains from tariffs aren't import value multiplied by tariff rate. Tariffs change consumer & company behavior, resulting in less income & corporate tax revenue. Over 10 years, net revenue from a 10% baseline tariff, + retaliation, would be ~$1.6 trillion. #PIIECharts
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Committee members have been comparing federal deficits with household debt. Dr. Blanchard says public debt plays a macrostabilization role in the economy that private debt does not, so comparing public debt with private, whether that is consumer or business, is not applicable.
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It is our honor to announce the Government of Japan has bestowed the Imperial Decoration the Order of the Rising Sun, Gold Rays with Neck Ribbon upon PIIE President @AdamPosen. Read the full press release here:
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In 1930, the House of Reps to alleviate effects of the. anyone? Anyone? Great Depression, passed a tariff bill? Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered? Raised tariffs for revenue for the fed gov't. Did it work? It did not, the US sank deeper in the Depression.
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*taps mic* . is this thing on.
We are once again reminding you that tariffs are taxes & Trump's proposed 20% across-the-board tariff plus 60% on imports from China would cost a typical household over $2,600 per year. #PIIECharts .Details:
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Since 1980, the pretax income of the bottom half of workers in European countries has grown by 37%. For the bottom half of Americans, pretax income has risen only 3%. Learn more about economic inequality & how to fix it:
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Average US tariffs on Chinese exports are now 134.7%—more than 40x higher than before the US-China tariff war began in 2018. Details, explanation of why it's not 145%, & data here:
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The world's billionaires and how they made their money | Based on research by PIIE's @CarolineFreund
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Tariffs are still taxes. Trump's proposed 20% across-the-board tariff plus 60% on imports from China would cost a typical household over $2,600 per year. #PIIECharts .More:
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The US economy will slow sharply in 2025; tariffs & other US policy shifts dampen activity & fuel global uncertainty. Tariffs are raising prices, disrupting supply chains, eroding real incomes, & making it harder for businesses to plan. #PIIECharts
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