“The Production Relocation and Price Effects of U.S. Trade Policy: The Case of Washing Machines” by Dr. Aaron B. Flaaen
Dr. Aaron B. Flaaen
Research and Statistics
Federal Reserve Board of Governors
We estimate the price effect of U.S. import restrictions on washers. The 2012 and 2016 antidumping duties against South Korea and China led to downward or minor price movements due to subsequent production relocation to other export platform countries. With the 2018 tariffs, on nearly all source countries, the price of washers increased nearly 12 percent. Interestingly, the price of dryers—not subject to tariffs— increased by an equivalent amount. Factoring in dryer prices and price increases by domestic brands, the 2018 tariffs on washers imply a tariff elasticity of consumer prices of above one.