Tariffs on China Risk Hurting U.S. Economy More Than Data Suggest, NY Fed Says

(Bloomberg) —

New research suggests President Donald Trump’s latest tariffs on imports from China could hit the American economy more than official US trade data indicate.

The impact, according to a study from economists at the Federal Reserve Bank of New York, will be especially severe if the Trump administration ends favorable treatment of so-called “de minimis” imports — or those valued at less than $800.

“US imports from China have decreased by much less than has been reported in official US statistics,” Hunter L. Clark, a New York Fed researcher, wrote in a blog post published on Wednesday. “As a result, the recent tariff increase on China could have a larger impact on the US economy than is suggested by official US data on the China import share.”

There is little doubt that a harsher treatment of Chinese products under the first Trump administration, much of which was continued by the Biden White House, reduced China’s share of US imports. But by how much? The answer varies depending on which country you choose to believe.

US data show that imports from China declined to 13.4% of total imports in 2024 from 21.6% in 2018. In nominal terms, they fell by $66 billion to $439 billion in that time frame. 

But China’s data tell a different story. They show “exports as a share of the US import market have only declined by 2.5 percentage points, less than one-third of the decline shown in the US data,” according to the blog post. China’s data also says the nominal value of exports increased by $91.2 billion, to $524 billion. 

“Simply stated, the US is saying it buys from China a lot less than what China says it is selling,” Clark wrote. 

Thus, the impact of the new tariffs could be bigger than expected.

De Minimis Exemption

The hit will be amplified if Trump does away with an exemption threshold for direct-to-consumer imports. That threshold was increased to $800 from $200 in 2016, contributing to “explosive growth” in those orders that likely accounts for a large portion of the discrepancy between US and Chinese statistics, according to Clark.

Since returning to the White House in January, Trump has imposed a new 10% tariff on Chinese goods. He also announced, and then delayed, a plan to end tariff exemptions for “de minimis” merchandise from China and Hong Kong valued below $800.

Those smaller imports from China to the US are challenging to measure, but are growing fast. Figures from China conflict with estimates from the Congressional Research Service, but both sources suggest the volume has surged.

“It appears highly plausible that the US’s de minimis imports from China increased by at least 50%, or even more than doubled, and were in excess of $50 billion last year,” Clark wrote. “This suggests that US consumers could face larger consequences than meet the eye from the recent 10 percentage point tariff increase if the de minimis exception is ended for China, and Chinese sellers do not slash their profit margins by reducing their export prices.”

© 2025 Bloomberg L.P.

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