Tariffs and markups in retailing

Cole, Matthew T.; Eckel, Carsten

doi:10.1016/j.jinteco.2018.04.009

Cited by 11 publications

(6 citation statements)

References 43 publications

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“…Our results suggest that retailers are absorbing a significant share of the increase in the cost of affected imports by accepting lower profit margins on those goods. 4 This empirical evidence supports the idea that a more complete understanding of the full supply chain, from "at-the-dock" importers through to final retailers, is important to capture the full implications of any trade policy, a point made theoretically in Cole and Eckel (2018).…”

mentioning

confidence: 59%

Tariff Pass-Through at the Border and at the Store: Evidence from US Trade Policy

Cavallo¹,

Gopinath²,

Neiman

et al. 2021

American Economic Review: Insights

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We use microdata collected at the border and the store to characterize the price impact of recent US trade policy on importers, exporters, and consumers. At the border, import tariff pass-through is much higher than exchange rate pass-through. Chinese exporters did not lower their dollar prices by much, despite the recent appreciation of the dollar. By contrast, US exporters significantly lowered prices affected by foreign retaliatory tariffs. In US stores, the price impact is more limited, suggesting that retail margins have fallen. Our results imply that, so far, the tariffs’ incidence has fallen in large part on US firms. (JEL E31, F13, F14, F31, L11)

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confidence: 59%

Tariff Pass-Through at the Border and at the Store: Evidence from US Trade Policy

Cavallo¹,

Gopinath²,

Neiman

et al. 2021

American Economic Review: Insights

View full text Add to dashboard Cite

show abstract

“…Our results suggest that retailers are absorbing a significant share of the increase in the cost of affected imports by earning lower profit margins on those goods. 4 This empirical evidence supports the idea that a more complete understanding of the full supply chain, from "at-the-dock" importers through to final retailers, is important to capture the full implications of any trade policy, a point made theoretically in Cole and Eckel (2018).…”

Section: Introductionmentioning

confidence: 59%

Tariff Passthrough at the Border

Gopinath¹,

Calvallo²,

Neiman³

et al. 2019

IMF Working Papers

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We use micro data collected at the border and at retailers to characterize the effects brought by recent changes in US trade policy - particularly the tariffs placed on imports from China - on importers, consumers, and exporters. We start by documenting that the tariffs were almost fully passed through to total prices paid by importers, suggesting the tariffs' incidence has fallen largely on the United States. Since we estimate the response of prices to exchange rates to be far more muted, the recent depreciation of the Chinese renminbi is unlikely to alter this conclusion. Next, using product-level data from several large multi-national retailers, we demonstrate that the impact of the tariffs on retail prices is more mixed. Some affected product categories have seen sharp price increases, but the difference between affected and unaffected products is generally quite modest, suggesting that retail margins have fallen. These retailers' imports increased after the initial announcement of possible tariffs, but before their full implementation, so the intermediate passthrough of tariffs to their prices may not persist. Finally, in contrast to the case of foreign exporters facing US tariffs, we show that US exporters lowered their prices on goods subjected to foreign retaliatory tariffs compared to exports of non-targeted goods.

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“…Rong and Xu [6] assessed the impact of manufacturer altruistic preferences and government subsidies on the multinational green supply chain under dynamic tariffs. Cole et al [7] showed that the price rise effect of retailers would affect the price transmission of tariffs to other goods along the supply chain. Cipollina et al [8] studied the impact of EU agricultural tariff policy on agricultural product imports and found that the tariff reduction directly increased the import volume of products.…”

Section: Literature Reviewmentioning

confidence: 99%

Decision-Making of Transnational Supply Chain Considering Tariff and Third-Party Logistics Service

Chen

2022

Mathematics

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Countries’ economic policies, such as tariff barriers, have a profound impact on the global economy and international trade. The imposition of tariffs seriously disturbs the global trade and supply chain operations. This paper studies a supply chain composed of an overseas manufacturer, a domestic supplier and a third-party integrated international logistics service provider. A three-level decentralized leader-follower decision-making model and its variant--leader-follower alliance decision-making models are established, and the influences of revenue sharing and cost sharing on the three-level decentralized decision-making are analyzed. The results show that it is difficult for the supply chain to achieve coordination when the transportation and insurance costs are considered in the tariff cost. The increase of tariff rates will reduce the profits of all parties and the overall profit of the supply chain, and weaken the dominant position of the supplier in the supply chain. Revenue sharing can improve the supply chain performance; the performance of the whole supply chain cannot be improved or may even deteriorate by sharing the transportation cost alone. The study can provide practitioners with implications for how to carry effective cooperation and coordination in the supply chain and how to effectively reduce the influence of tariffs in the global trade system.

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Tariffs and markups in retailing

Cited by 11 publications

References 43 publications

Tariff Pass-Through at the Border and at the Store: Evidence from US Trade Policy

Tariff Pass-Through at the Border and at the Store: Evidence from US Trade Policy

Tariff Passthrough at the Border

Decision-Making of Transnational Supply Chain Considering Tariff and Third-Party Logistics Service

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