Consumers, Mr. Tintelnot noted in an interview, often shop for a new washer and dryer at the same time. Their costs are similar. Rather than raise prices by 20 percent on washers and throwing off that balance — no one likes an unbalanced washing machine — companies instead raised both washer and dryer prices, by 11.5 percent each.
“Given that many consumers buy these goods in a bundle, the price increases were partially hidden by raising the price of dryers,” Mr. Tintelnot said. “That’s very clearly visible.”
It is hardly surprising that the tariffs drove up the price of foreign washers. Perhaps more unexpectedly, they also prompted American manufacturers to raise their prices.
Companies that largely sell imported washers, like Samsung and LG, raised prices to compensate for the tariff costs they had to pay. But domestic manufacturers, like Whirlpool, increased prices, too, largely because they could. There aren’t a lot of upstart domestic producers of laundry equipment that could undercut Whirlpool on price if the company decided to capture more profits by raising prices at the same time its competitors were forced to do so.
The researchers do not think that Mr. Trump’s other tariffs, on metals used in washing machine manufacturing, contributed to the higher price of American products.
“It’s unlikely that the domestic manufacturers’ price increase we document here are due to higher input costs — due to tariffs on other inputs such as steel — since we use other appliances with similar steel content as a comparison group,” Mr. Tintelnot said. “Instead the price increases are likely due to domestic firms exploiting their market power.”
Of course, consumer costs are only half the equation in trade policy. There is also the question of job creation: How much the policy appears to have shifted production, and employment, of the good in question from foreign countries to the United States. The authors explore that question also, and they emerge with evidence of the striking degree to which previous American efforts to shield domestic manufacturers from foreign competition ended up pushing washing machine production across borders, almost overnight, in order to avoid American import duties.