Trump Tariffs: A New Era in US Trade Policy

For all the noise over India being the tariff king, the US effective tariff rate for all countries is now estimated at 17%, according to Fitch Ratings. This comes after the latest reciprocal tariff announcements, marking a significant shift in US trade policy.

Comparing Global Tariff Rates

In 2024, India's simple average tariff was estimated at 16.2%, with agricultural products facing a 36.7% levy and non-agricultural goods at 13%. The US, traditionally a champion of low tariffs, had an average tariff of 3.3%, but with new additional duties, this is set to increase significantly.

Impact on Key Sectors

Specific goods like peanuts in shells and peanut butter are facing tariffs as high as 105% and 44%, respectively. Footwear, dates, apricots, and dried onions are also in the high tariff range, affecting global trade dynamics.

Customs Revenue Boom

The new tariffs are projected to generate $50 billion in monthly customs revenue for the US, doubling India's projected customs revenue for the 2025-26 financial year. This move is seen as a strategic effort by the Trump administration to bolster US revenue streams.