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Expand chart
Reproduced from Federal Reserve Bank of New York; Chart: Axios Visuals

U.S. consumers will actually pay less in tariff penalties or taxes with the imposition of 25% tariffs on Chinese goods, but they'll pay a lot more overall, according to new research from the New York Fed.

By the numbers: The higher tariff rate of 25% will cost American consumers more than $100 billion a year. Most of that loss will come from the deadweight loss of consumers buying more expensive, or less efficient, products because of the tariffs.

The N.Y. Fed's Mary Amiti, Stephen J. Redding, and David E. Weinstein explain:

"[T]he 10 percent tariffs on Chinese imports might cause some firms to switch their sourcing of products from a Chinese firm offering goods for $100 a unit to a less efficient Vietnamese firm offering the product for $109. In this case, the cost to the importer has risen by nine dollars, but there is no offsetting tariff revenue being paid to the government. This tariff-induced shift in supply chains is therefore called a deadweight or efficiency loss."

What's next? A new report from Citi estimates additional tariffs on the list of $300 billion worth of Chinese goods will be much worse for consumers.

  • Goods included will represent 67% of total imports of consumer goods from China, 66% of vehicles, 19% of industrial supplies and 38% of capital goods.

Go deeper: The world can't afford a trade war right now

Go deeper

Ben Geman, author of Generate
11 mins ago - Economy & Business

GM's shrinking deal with Nikola

Illustration: Rebecca Zisser/Axios

General Motors will no longer take an equity stake in Nikola Corp. or build its pickup truck, under a revised deal that still envisions GM as a key tech supplier for Nikola's planned line of electric and fuel cell heavy trucks.

Driving the news: The revised agreement Monday is smaller in scope than a draft partnership rolled out in September that had included a $2 billion stake in the startup and an agreement to build its Badger pickup.

1 hour ago - Technology

Exclusive: Facebook's blackout didn't dent political ad reach

Photo: Valera Golovniov/SOPA Images/LightRocket via Getty Images

Americans saw more political ads on Facebook in the week before the 2020 election than they did the prior week despite the company's blackout on new political ads during that period, according to Global Witness, a human rights group that espouses tech regulation.

Why it matters: The presidential election was a key stress test for Facebook and other leading online platforms looking to prove that they can curb misinformation. Critics contend measures like the ad blackout barely made a dent.

Wall Street wonders how bad it has to get

Illustration: Aïda Amer/Axios

Wall Street is working out how bad the economy will have to get for Congress to feel motivated to move on economic support.

Why it matters: A pre-Thanksgiving data dump showed more evidence of a floundering economic recovery. But the slow drip of crumbling economic data may not be enough to push Washington past a gridlock to halt the economic backslide.