evidence: Additionally, under trade diversion, the importing country loses the tariff revenue it had collected on those imports which now come in duty free from its bloc partner. The consumer in the importing partner does gain, because the imported good no longer has to bear the cost of the tariff; however, the consumer’s gain is necessarily less than or equal to the lost customs revenue, so the nation as a whole is less well off . Thus, trade diversion hurts both the importing country and the rest of the world. These loses are greater than the gains to the bloc member that gains exports due to trade diversion. [...] Yi notes that tariff reductions have a far greater impact on these global supply chains than they do on traditional trade. To take the suit example, assume that China, Bangladesh, and the United States each reduces its tariffs by 1 percent and that imported fabric and buttons account for half the cost of the suit made in China; then the cost of producing the suit in China will be reduced by 0.5 percent. Coupled with the 1 percent U.S. tariff reduction, the cost to the U.S. consumer would be reduced by 1.5 percent. If the suit had been wholly produced in China, the cost to the consumer would have been reduced by just the U.S. tariff reduction, or 1 percent.