Tariffs are having only small and sporadic effects on consumer prices, according to a study from the Federal Reserve Bank of New York.
In the supplemental questions to the Empire State Manufacturing and Business Leaders Survey, just 7.3 percent of manufacturers in New York state said tariffs were having a significant upward effect on their selling prices.
Nearly half of the manufacturers, 47.9 percent, said tariffs had no effect on selling prices. Another 10 percent said there was a significant or slight downward effect.
Another 35.3 percent said the tariff had a slight upward effect on prices.
The results appear to confirm that the main effect of tariffs in the U.S. has been to squeeze corporate margins rather than to tax U.S. consumers. In the survey, 44.9 percent of manufacturers said there was a slight downward effect on their bottom lines, while 6.5 percent said there was a significant downward effect. On the other hand, 11.6 percent said there was a slight upward effect and 3.6 percent saw a significant upward effect.
This suggests that it is misleading to describe the Trump tariffs as a revival of “protectionism.” Older protectionist measures were typically the result of domestic manufacturers seeking to boost their bottom lines at the cost of higher prices to domestic consumers. Here it appears that domestic consumers are not paying higher prices.