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Who Pays for Tariffs Along the Supply Chain? Evidence from European Wine Tariffs

Author

Listed:
  • Aaron B. Flaaen
  • Ali Hortaçsu
  • Felix Tintelnot
  • Nicolás Urdaneta
  • Daniel Xu

Abstract

We study how tariffs affect prices along the supply chain using product-level data from a large U.S. wine importer during the 2019-2021 U.S. tariffs on European wines. Combining confidential transaction prices with foreign suppliers, U.S. distributors, and retail prices, we trace tariff passthrough from producers to consumers. Pass-through at the border is incomplete, yet consumers paid more than the tariff revenue collected. The dollar markups per bottle for the importer contracted, but expanded for the combined distributor-retailer segment. Price changes along the chain reached consumers after one year. We also document tariff engineering that biases unit values in trade statistics.

Suggested Citation

  • Aaron B. Flaaen & Ali Hortaçsu & Felix Tintelnot & Nicolás Urdaneta & Daniel Xu, 2025. "Who Pays for Tariffs Along the Supply Chain? Evidence from European Wine Tariffs," NBER Working Papers 34392, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34392
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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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