Washington, United States:
The delay of US President Donald Trump’s stator tariff may have won brief relief on Wall Street, but analysts say his actions – which kill China especially difficult – already bring the average American effective tariff rate to higher than a century.
In addition to widely implementing the new 10 percent of the new 10 percent tariffs on goods from most American trading partners, Trump has also removed the duties on steel, aluminum and auto imports since their returning to their White House.
But on Wednesday, he supported even more high rates on dozens of economies including the European Union and Asian manufacturing hub Vietnam after a sharp sale in the US government’s bond markets-although it doubled on action against China.
Many of the world’s second largest economy now face levy of at least 145 percent – the total additional figure Trump has imposed this year.
Erica York of Tax Foundation said, “The newly implemented tariffs now affect $ 2.4 trillion of US imports or about 75 percent.”
“Compared to Trump’s first term, this is a large -scale growth, as his first tariff affected US imports of about 380 billion or 15 percent,” he explained to AFP.
‘The highest since 1903’
Researchers at the budget lab at Yale University estimate that “consumers face a 27 percent of the overall average effective tariff rate, which is the highest since 1903.”
He said, “This is only a bit different, where the effective rate was before the April 9 announcement,” he said.
Even after accounting for consumption change, the average tariff rate will be 18.5 percent, the budget lab is estimated. This will be the highest since 1933.
Thibalt Denmil, a partner at the Center for Strategic and International Studies (CSIS), estimates that the US tariff rate was 2.4 percent in December 2024 – a figure that is now in the north of 20 percent.
“This is mostly due to the fact that we still have a 125 percent tariff rate on China,” he said, referring to the latest duties on Chinese goods, Trump.
125 percent of tariffs, which came into effect on Thursday, raised Trump’s new tariff to 145 percent to target China this year in collaboration with 20 percent before the alleged role in China’s alleged Fentenal Supply Series.
Even a very little tariff will greatly affect the world’s largest economy, Denmil said, “Given China, the third most important trading partner in the United States.”
Analysts have also reported that Trump’s actions marked the biggest tariff growth since the 1930 Smut-Holly Act, which deepened the Great Depression.
Shrinking imports
Trump claimed that the United States was taking “about $ 2 billion per day” from the Tariff.
He has referred to them as a means to increase government revenue, promote industrial areas of the country and pressurize other governments on US priorities.
But experts warn that the cause of prohibitory high duties on China will be the US imports to contract with the country.
JP Morgan’s leading American economist Michael Feroli recently stated in a note that with the Chinese tariffs reaching a punitive level, even conservative estimates suggest that Chinese’s imports should “dramatically shrink”.
If so, York of The Tax Foundation said that imports from China would generate “very low tariffs”.
“Overall, we estimate the tariff and announced that the vengeance would reduce the US GDP by 1.0 percent,” he said.
With Trump’s latest tasks, Feroli hopes that “the drag is likely to be less than the business policy, and thus the possibility of recession is a close call.”
“However, we still think that a contraction in real activity is not more likely at the end of this year,” he said.
(Except for the headline, the story has not been edited by NDTV employees and is published by a syndicated feed.)