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International trade

US Tariff Rate Hits 20.1% Highest Since Early 1910s

Strategic Insights

— 1 min read

The US average tariff rate has surged to 20.1%, the highest level since the early 1910s, after new duties took effect. This significant increase is attributed to President Donald Trump's "reciprocal" tariffs announced in April, which briefly drove the average rate to 24.8% in May. The current rate is a stark contrast to the 2.4% rate in force at the time of Trump's inauguration in January 2017. The trade "truce" between the US and China has expired, and new tariffs are set to take effect next week.

Key Takeaways:

  • The US average tariff rate has increased to 20.1%, the highest level since the early 1910s, with the latest rates applied to 2024 trade volumes.
  • The current rate is a significant increase from the 2.4% rate in force at the time of President Donald Trump's inauguration in January 2017.
  • The trade "truce" between the US and China has expired, and new tariffs are set to take effect next week.
  • The rate includes lower tariff levels negotiated with the EU, Japan, South Korea, and other nations, but was higher than the baseline 10% rate the US introduced.
  • The increased tariff rate is comparable to the nearly 20% rate applied in the 1930s, a period economists consider behind the severity and duration of the Great Depression.
  • The new duties took effect Thursday, according to WTO and IMF data.

Statistics:

  • The US average tariff rate has increased to 20.1%, the highest level since the early 1910s.
  • The rate was briefly driven to 24.8% in May, a figure unseen since 1904, according to data from the US International Trade Commission.
  • Compared to the 2.4% rate in force at the time of President Donald Trump's inauguration, the current rate is 750% higher.
  • The new rate applies the latest rates to 2024 trade volumes.
  • The trade "truce" between the US and China expired, with new tariffs set to take effect next week.

Sources:

  • AFP
  • World Trade Organization (WTO)
  • International Monetary Fund (IMF)
  • US International Trade Commission
  • Alliance News Ltd. All Rights Reserved.

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