The Great Wall of Chinese goods: The effect of tariff-induced re-rerouting on euro area consumer prices
Tariffs affect both supply and demand, possibly with contrasting effects on prices. This column shows that renewed US-China tensions could redirect Chinese exports to the euro area, boosting supply and lowering prices. Using detailed trade and inflation data, it estimates that such diversion could cut core euro area inflation by 0.3 percentage points over two […]
