Submitted by Taps Coogan on the 25th of July 2018 to The Sounding Line.
In light of the escalating global trade tensions, we recently looked at the weighted average import tariffs that China imposes on goods from the US and vice versa. The comparison showed that Chinese import tariffs on US goods are over twice as high as US tariffs on Chinese goods (6.3% vs 2.9%).
The disparity between import tariffs in the US and those of its trading partners isn’t limited to China. According to the most recent World Bank data, the world imposes a weighted average import tariff of 6.39% on imports from the US, while the US imposes a weighted average tariff of just 1.67% on imports from the rest of the world, a nearly four fold difference.
The story is the same with nearly every major US trading partner. The following chart shows the weighted average import tariff imposed on US exports to the US’s top trading partners and vice versa. The European Union and its individual member states, as well as Singapore, have been excluded because the relevant data is not available.
Canada, Mexico, China, Japan, South Korea, Brazil, India, and Thailand all impose higher tariffs on imports from the US than the US imposes on imports from them. In fact, all of these countries impose tariffs more than twice as high as the US imposes on them. Only Switzerland and Vietnam are the exceptions.
While there are numerous reasons for the US’s massive trade deficits, one of the primary ones is the large difference between US tariffs and the tariffs applied by other countries on US products. For precisely the same reasons that people are concerned about the possibility of the US increasing tariffs on its trading partners, people should be concerned about the large imbalances in tariff levels already on US exports. Those imbalances can be corrected by the US raising its tariffs or they can be corrected by other countries lowering their tariffs. For the sake of global trade, hopefully it will be the later.
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