Kealey Boyd interviewed Dr. DeMartino for her article about “why Chinese art narrowly evaded a new 10% tariff on Chinese goods”. Excerpts of the article are listed below.
“Chinese art may return to future tariff lists, so what effect will it have on prices, and what strategies will galleries and collectors leverage to avoid additional costs? Economist George DeMartino, Professor of Economics at the University of Denver’s Josef Korbel School of International Studies, told Hyperallergic, “Highly-valued, non-substitutable art objects, newly produced or antiques, have inelastic demand so the price would have risen as a result of the tariff, but the amount of trade would largely have been unaffected.” The minimal effect on trade quantity would likely be due to collectors looking for substitutes for their goods, or art in this case.”
“Economist DeMartino notes that a 25% tariff on a small market that presents no competitive disadvantage to local producers is unusual. “You could say that like the art itself, the value of the tariff would have been ‘symbolic’ rather than substantive. It would have served no economic purpose whatsoever.” In fact, the tariff would be doing the Chinese government a favor, according to Daniel Chen, by accelerating the repatriation of antiques, which is an important initiative in China.”
“The art tariffs were not only baffling to art dealers, but the rhetoric around their application adds additional uncertainty, Van Tress notes, “The Chinese know there is a trade imbalance, but they don’t like rudeness. It could become a much bigger problem than whether the art market sees a tax increase.” DeMartino agrees, “Trump is unraveling US economic and political influence abroad at a startling rate by offending US allies, and by teaching other countries’ leaders that the US is now an undependable partner.””
George F. DeMartino 