Who pays for the tariffs and why: The asymmetric tariff pass-through between China and the US

By Chaonan Feng, Liyan Han and Lei Li. They are with The Centre for Economic Policy Research (CEPR). Excerpt:

"The question of who bore the burden of tariffs during the US-China trade war has garnered significant attention in the literature. This column documents the asymmetric tariff pass-through between China and the US and provides an explanation for this phenomenon. While Chinese importers only paid 68% of China’s retaliatory tariffs, US importers shouldered 93% of the US tariffs. The puzzling difference can be primarily attributed to the two countries’ different import structures and product heterogeneity in tariff pass-through."