Working Paper

Import Source Reallocation and Aggregate Price Dynamics in the United States

Abstract: This paper studies the impact of changes in the composition of U.S. import sources on aggregate import prices and their implications for consumer prices. We decompose import price changes into within-source price adjustments and changes in sourcing composition. Using bilateral import data, we find that sourcing from lower-cost suppliers, particularly China, put sustained downward pressure on aggregate import prices until the mid-2010s. Since then, shifts away from China have partially reversed this effect, raising both import and consumer prices. We also find sourcing reallocation responds sharply to trade policy, playing a notable role during the 2018 U.S.–China trade war.

JEL Classification: F14; E31; C43; E1;

https://doi.org/10.20955/wp.2025.018

Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 2025-08-15

Number: 2025-018