New York Fed: Tariffs on China risk hurting US economy more than data suggest

A report by the Federal Reserve Bank of New York has cautioned that US President Donald Trump's recent tariffs on Chinese imports could hit the US economy more than official US trade data indicate.

Published on Wednesday, the study highlighted gaps in official trade data and warned that the true impact of tariffs on American consumers may have been underestimated.

The New York Fed economists' analysis revealed that US import data understate Chinese imports, citing statistical discrepancies between the two countries.

"Simply stated, the US is saying it buys from China a lot less than what China says it is selling," wrote New York Fed economic policy advisor Hunter L. Clark in a blog post. 

"As a result, the recent tariff increase on China could have a larger impact on the US economy than is suggested by official US data on the China import share," he said.

Clark warned that the US tariffs could amplify the burden on households with American consumers facing "larger consequences" than expected.

This would be especially so if the Trump administration ends favorable treatment for "de minimis" imports – meaning zero tariffs for items valued at less than $800 – for China and Chinese sellers refused to absorb costs by lowering prices, he wrote.

(Cover via CFP)