Tariff pass-through and implications for domestic markets: Evidence from U.S. steel imports.

Recent studies report that during the U.S. trade war, the overall burden of tariffs has entirely passed on to U.S. firms and consumers in terms of higher import prices, but the pass-through is incomplete in the case of steel products. Using 10-digit import data from U.S. Customs for 2018–2019, contrary to the recent literature, we find that import tariff pass-through is complete for steel products. We also find significant and large supply chain adjustments following the imposition of tariffs. However, despite the supply chain adjustments, the overall imports of steel products, which moved in tandem with domestic steel consumption over the last ten years, exhibited a declining trend. The overall steel imports declined from 34.5 in 2017 to 26.3 million metric tons in 2019. During the same period, domestic production increased from 81.6 to 87.9 million metric tons, almost equal to the peak production the U.S. achieved in 2012 and 2014. [ABSTRACT FROM AUTHOR]