US Tariffs At or Near Lowest Levels Ever on U.S. Tariffs

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Trade is a dirty and ridiculous business. While U.S. tariffs in total continue to be at or near their lowest levels ever,  the duties imposed on specific imported goods vary widely – depending on what they are, where they’re coming from and who owns them.

The stiffest tariffs are levied on apparel and clothing, according to a study just published from respected Pew Research. The so called HTS, Harmonized Tariff Schedule (think –  it hits your wallet) is specific: It says how the duty on “artificial flowers, foliage and fruit” differs depending on whether the objects in question are made from plastic (8.4%), feathers (4.7%) or man-made fibers (9%).

Absurd money interests have obviously made a mockery of equal treatment, not all goods are equal like the men in our declaration of Independence and ultimately constitution,\.

During 2017, says the U.S. International Trade Commission, import duties totaled $33.1 billion – equal to 1.4% of the total value of all imported goods, and 4.7% of the value of all imports subject to duty. Most imported goods carry no duty at all. Only 30.4% of the $2.33 trillion in total imported goods, or about $708.6 billion, were subject to duty, the rest entered the U.S. free.

The aggregate figures hide a complex array of individual tariff rates, on thousands of precisely defined import categories. These are spelled out in the Harmonized Tariff Schedule of the United States  mentioned above, the latest edition of which runs to 3,713 pages – almost as long as the Internal Revenue Code, which also favors special interests.

Pew notes that broadly speaking, the largest categories of U.S. imports tend to carry relatively low tariff rates, while the highest rates usually are found in relatively small categories. Clothing is the main exception: The two main classifications of “apparel and clothing accessories” together accounted for $80.6 billion in imports last year (3.5% of the total); nearly $64 billion of those imports, or 79%, were “dutiable” or subject to duty. The average tariffs on the dutiable portions were 18.7% for knitted or crocheted clothing, and 15.8% for non-knitted or crocheted items – the two highest average rates out of 98 broad import categories. Footwear was close. Nearly all the $25.5 billion in imported footwear is subject to duty, at an average rate of 11.9%.

By contrast, average duties were far lower on “electrical machinery and equipment,” the single largest category of imported goods. This category includes telecommunications gear, computer chips, TVs and broadcasting equipment, electrical transformers, and related products. The U.S. imported nearly $347 billion worth of such goods last year, but only 21.3% of them carried a duty; the average duty on that portion was just 2.7%.

Computer equipment and industrial machinery is the next-biggest import category ($339.4 billion), but only $57 billion of those imports are taxed, at an average rate of 3%. “Vehicles and parts” accounted for $292.6 billion in imports but generated less than $3.4 billion in tariff revenue (2.7% of the dutiable value).

Maybe it takes a Dirty Administration to Clean Tariffs Up?

The imported steel products singled out by apparent whim for 25% tariffs by President Trump’s administration totaled $29.3 billion last year, according to Pew’s analysis of ITC data; all of them duty-free before. The categories of aluminum imports specified for an additional 10% tariff in Trump’s order amounted to just under $17 billion; about a fifth of those imports already were subject to duties, averaging 3.5% of the assessed value. (Steel and aluminum imports from Canada and Mexico, however, were excluded from the new tariffs, pending the outcome of ongoing talks to renegotiate the North American Free Trade Agreement.)

Minerals and metals are one of the classes of imports on which the U.S. has had particularly low tariffs, according to “World Tariff Profiles” report, produced jointly by the World Trade Organization, International Trade Centre and UN Conference on Trade and Development. The “average most-favored-nation applied duty” on minerals and metals was 1.7%, or 125th out of 138 countries and other economic units. (The “most favored nation,” or MFN, part of that metric refers to the tariffs each WTO member country promises to apply to all other WTO members, unless they’re part of a free trade area, customs union or other “preferential trade agreement.” Also, the report treats the 28-member European Union as a single entity, and it covers Hong Kong and Macao separately from the rest of China.)

The highest U.S. import taxes relative to the rest of the world are on petroleum: The average MFN applied rate of 6.5% is tied for 47th place, with Costa Rica. (The Cook Islands, an autonomous part of New Zealand, has the highest average petroleum tariffs: a whopping 168%.) Also, relatively high are U.S. tariffs on imported sugars and confectionery: The 16.4% average MFN tariff ranks 50th out of 138, though it’s nowhere near the 93.4% imposed by Turkey.

In general, countries tend to place their highest import duties on beverages (alcohol) and tobacco, which helps explain shelves at “duty-free shops” at international airports. The average MFN applied tariff on the “beverages and tobacco” category, according to the WTO data, is 35.8%. (The U.S. average rate, by contrast, is 19.1%.) Egypt takes first place with an 803% average applied tariff on beverages and tobacco

About Ken Zino

Ken Zino is an auto industry veteran with global experience in print and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.
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