Recent tariff increases suggest the U.S. is becoming increasingly closed to trade. A recent Economic Synopses essay explored how open the U.S. was to trade to begin with.
Economist Fernando Leibovici examined tariff and trade data for 2016 and found that U.S. tariffs were very low on average.2016 is the latest year for which trade and tariff data were available at a fine level of disaggregation. Tariffs averaged 3.1 percent across countries, while the trade-weighted average was 1.7 percent. He also found that only 34.8 percent of imports were subject to tariffs.
Leibovici also broke the analysis down into four groups of countries:
The results can be seen in the table below.
|U.S. Import Tariffs Disaggregated by Region
|Share of Aggregate Imports||Simple Average||Trade-Weighted Average||Share of Imports with Nonzero Tariffs|
|Rest of the World||22.5%||2.97%||2.24%||41.3%|
|SOURCES: UNCTAD's TRAINS and U.N.'s Comtrade databases.|
|Federal Reserve Bank of St. Louis|
Leibovici found that NAFTA countries—Canada and Mexico—had only 1 percent of imports subject to tariffs, which contributed to low import tariffs overall. On the other hand, he found that more than half of imports from the European Union and China were subject to tariffs.
Leibovici also examined which products were subject to the highest average tariffs. Tobacco and manufactured tobacco substitutes had the highest average tariffs, by far, at 33 percent.
“However, these account for a small share of aggregate imports,” Leibovici noted. “On the other hand, clothing-related products such as apparel, cotton and footwear are also subject to high tariffs, in the 5 to 10 percent range, and account for a considerably higher share of aggregate imports.”
Leibovici also noted that tariffs aren’t the only way to influence international trade.
“Examples of popular non-tariff barriers abound, ranging, for instance, from requiring unnecessary bureaucratic procedures to approve import transactions to providing subsidies to domestic producers to improve their competitiveness vis-à-vis foreign firms,” he wrote. “More work needs to be done to better quantify the impact of these non-tariff barriers on the U.S. economy’s degree of openness.”
1 2016 is the latest year for which trade and tariff data were available at a fine level of disaggregation.