U.S. businesses are bearing most of the tariff burden from the U.S.-China trade war, rating agency Moody’s Investors Service has said.
The rating agency in a report said that U.S. importers absorbed more than 90 per cent of the additional costs caused by the increased U.S. tariffs on Chinese goods.
“A majority of the cost of tariffs has been passed on to U.S. importers,’’ it said.
It added that the tariffs remain in place, pressure on U.S. retailers will likely rise, leading to a greater pass-through to consumer prices.
Meanwhile, the U.S. exporters also absorbed a large part of the costs from retaliatory tariffs imposed by China, because some of the exports targeted by the retaliatory tariffs were products that may be sourced from other places.
Higher trade tariffs were introduced during the previous U.S. administration, and most of them were still in place and affect half of the trade flows between the U.S. and China, the rating agency said.