U.S. Effective Tariff Rate Remains Stable at 14.1% Despite Recent Hikes

Strategic Insights -

The United States' effective tariff rate (ETR) has maintained its stability at around 14.1%, offset by lower estimated duties on Canada, Mexico, and the U.K. The ETR represents total duties as a percentage of total imports, and Fitch Ratings has updated its interactive tariff tool, the U.S. Effective Tariff Rate Monitor, to reflect recent changes. The U.S. has raised steel and aluminum duties to 50% from 25% earlier this month but kept the rate for U.K. auto imports at 25%. The U.S. has also granted the U.K. a reduction in auto tariffs to 10% for the first 100,000 vehicles imported each year, covering current U.K. annual auto export volumes to the U.S.

Key Takeaways:

  • The U.S. effective tariff rate remains stable at 14.1% despite recent hikes in steel and aluminum tariffs.
  • Lower estimated duties on Canada, Mexico, and the U.K. have offset the increased tariffs, keeping the ETR stable.
  • Fitch Ratings has updated its U.S. Effective Tariff Rate Monitor to reflect higher steel and aluminum tariffs, as well as lower tariffs on U.K. auto imports.
  • The U.S. has raised steel and aluminum duties to 50% from 25% earlier this month, but kept the rate for U.K. auto imports at 25%.
  • The U.S. has granted the U.K. a reduction in auto tariffs to 10% for the first 100,000 vehicles imported each year, covering current U.K. annual auto export volumes to the U.S.
  • The U.S. maintains a 25% tariff on auto and auto parts imports for all countries, with some exclusions for U.S. content in autos and auto parts compliant with the United States-Mexico-Canada Agreement (USMCA).
  • Fitch's ETR estimates for Canada and Mexico have decreased to around 7.5% and 9.5% from 10.9% and 12.1%, respectively, as these countries demonstrate greater export compliance with the USMCA.
  • The new higher steel and aluminum tariffs add 1.5% and 0.6% to Fitch's ETR estimates for Canada and Mexico, respectively.
  • The U.S. Effective Tariff Rate Monitor has also provided a more granular breakdown on tariff and duty estimates for Canada and Mexico, considering the tariff exemptions for USMCA-compliant goods.

Statistics:

  • U.S. effective tariff rate (ETR): 14.1%
  • Steel and aluminum tariffs: 50% (up from 25%)
  • U.K. auto imports tariff: 25% (down from 50%)
  • U.K. auto imports tariff reduction: 10% for the first 100,000 vehicles imported each year
  • Fitch's ETR estimates for Canada: 7.5% (down from 10.9%)
  • Fitch's ETR estimates for Mexico: 9.5% (down from 12.1%)
  • Fitch's ETR estimates for China: 41.4% (up from 39.1%)

Sources:

  • Fitch Ratings, "U.S. Effective Tariff Rate Monitor"