As US trade agreements stand at mid-October, the overall average effective tariff rate1 confronting US consumers is 18.0%, according to the budget lab calculations. This is the highest rate since 1934. It contrasts with a level of 2.3% at the end of 2024.
Since the administration’s ‘Liberation Day’ slew of tariffs on goods imported into the US, economists and investors have focused on further White House announcements on import levies. There has been much negotiation between the US and its trading partners, speculation about when definitive trade deals would be struck and uncertainty about how to interprete unexpected (and usually short-lived) threats of ‘reciprocal’ or retaliatory action.
The latest instance came on 10 October when President Donald Trump said he would impose an additional 100% tariff on goods from China, on top of the 30% already in effect. He also said the US would impose export controls on critical software. The moves are part of a tit-for-tat exchange between the world’s largest economies. China earlier tightened its rules for exports of rare earths.
Meanwhile in the US, revenues from the levies on a broad range of imported goods are now flowing. Revenues from customs duties have amounted to $195 billion since the start of the year (data to end September). That is 4.2% of total government receipts. It is up from $58 billion for January-September 2024 (or 1% of total receipts).
[1] total tariff revenue/total value of imports
