Whose Tariff Rates Are Higher?
By David Henderson
I’ve been having discussions with a number of pro-Trump friends who favor Trump’s raising of tariffs as a way to induce other countries’ governments to reduce their tariffs. They think my fear of a trade war is overstated.
One major premise of their argument is that the United States has lower tariff rates than other countries. I don’t think that matters much for the argument: even if it’s true, the dangers of a trade war are serious. Indeed, I have shared their premise.
The first thing to notice is how low tariff rates are generally, something I have pointed out previously. But the second thing to note is this, in the words of Simon Lester:
Taking all of these tariff figures into account, it can be hard to come up with a precise ranking, but you can see that New Zealand and Australia are the low tariff leaders. The U.S., EU, Canada, Japan, and Switzerland come next, clustered closely together. Mexico has tariffs that are a bit higher. Then come China and Brazil with even higher tariffs.
I emphasize that whether U.S. tariff rates are higher or lower than other countries’ tariff rates is not important for my argument about the dangers of starting a tariff war. But it does seem important to some of those whom I argue against. Are they factually correct about China? Yes. Canada? Yes by the WTO measure, but no by the World Bank measure. Average the two measures and you get an average of 2.0 percent for the United States and 1.95 percent for Canada. In other words, virtually no difference.