Consumers suffer most in tariff escalation: US expert

Xinhua
Consumers usually suffer the most in times of tariff hikes, a US expert has said.
Xinhua

Consumers usually suffer the most in times of tariff hikes, a US expert has said.

Gabriel Collins, Baker Botts Fellow in Energy and Environmental Regulatory Affairs at the Baker Institute Center for Energy Studies, a think tank and a nonpartisan center for public policy research based in Houston, southern United States, made the remarks when commenting on the trade tension between the United States and China.

"I think the party who often suffers the most is the consumer themselves because that is where tariffs end up. The increased prices passed on to the consumers," he said in an interview with Xinhua on Tuesday.

Collins explained that with tariff hikes, companies have no other choice but to pass some of the price burden to the end consumer, which would fundamentally destroy economic development.

"The burden of the tariff has to find somewhere. So the question is does the company effectively eat that or pass some of it to the consumer. But the bottom line is either way you are destroying economic value in that process. It's not a welcoming event by any means," said the expert.

As for the trade deficit between the United States and China, Collins said main stream economists believe trade deficit reflects the comparative advantage one side may have over another, and also the differences in national saving rate. He argued that putting tariff is not a good option to resolve trade deficit which is not accepted as purely negative.

"I think the trade deficit being inherently negative is not widely accepted in the US economic studies. It's something not necessarily reflects reality," he commented, adding that "the tariff is not the most appropriate tool in most cases dealing with the real core issue we face in US-China economic relationship."

Washington on Friday announced a 25-percent additional tariffs on US$34 billion of imports from China.

In the latest escalation of its trade offensive against China, the United States said Tuesday it will impose 10-percent tariffs on an additional 200 billion dollars of Chinese imports.

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