Consumers, Mr. Tintelnot noted in an interview, often buy for a new washer and dryer at the same time. Their costs are the same. Instead of raising the prices by 20 percent on slices and throwing out that balance – no one likes an unbalanced washing machine – companies instead increased both the washer and dryer, by 11.5 percent each.
"Given that many consumers buy these items in a package, the price increases were partially hidden by increasing the price of tumble dryers," Tintelnot says. "It's very clear."
It is not surprising that the tariffs raised the price of foreign disks. Perhaps more unexpectedly, they also asked US producers to increase their prices.
The researchers do not believe that Mr. Trump's other rates, on metals used in the washing machine industry, contributed to the higher price of American products.
"It is unlikely that the domestic producer's price increases we document here is due to higher enrollment costs – due to tariffs on other inputs such as steel – since we use other appliances with similar steel content as a comparison group," tintelnot. "Instead, price increases are probably due to domestic companies taking advantage of their market power."
Of course, consumer costs are only half of the trade policy equation. That is also the question of job creation: How much policy seems to have changed production and employment of the relevant good from abroad to the US The authors also investigate this issue, and they provide evidence of the striking degree that former US attempts to shield domestic producers from foreign competition ended up pushing the washing machine production across borders, almost overnight in order to avoid US import duties .