US firms are paying almost all the cost of President Donald Trump’s tariffs on Chinese imports, say researchers at the International Monetary Fund (IMF), whose findings contradict Trump’s assertions that China is footing the bill. Some such tariffs have been passed on to US consumers, while others have been absorbed by importing firms through lower profit margins. The IMF paper concludes what most private economists have argued for months: that China does not pay US tariffs, American consumers and companies do. Co-written by IMF chief economist Gita Gopinath, the paper says a trade war that escalates with all the threatened tariffs will subtract about a third of a percentage point of from global gross domestic product (GDP), “with half stemming from business and market confidence effects,” according to a recent IMF blog post. “This type of scenario is among the reasons why we referred to 2019 as a delicate year for the global economy,” the IMF economists wrote.
