Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314649 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11610
Publisher: 
CESifo GmbH, Munich
Abstract: 
Using disaggregated US household expenditure data, we study the distributional consequences of the US-China trade war. We estimate a highly flexible demand system to compute household-specific price indexes. The increases in US tariffs on Chinese products between 2018 and 2019 led to an average price index increase of 1.09%, with a disproportionately larger impact on low-income households. Specifically, we document a 0.9 percentage point smaller increase in the household price index for the top 20% income households compared to the bottom 20%. The dif-ference stems from wealthier households' greater expenditure adjustments and smaller reductions in product variety.
Subjects: 
US-China trade war
tariffs
income inequality
distributional effects of tariffs
household consumption
JEL: 
F14
D31
F13
Document Type: 
Working Paper
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