U.S. effective tariff rate dips to 13.6% after trade deals, Fitch estimates

[Port of Barcelona]
beingbonny

The U.S. effective tariffs rate ("ETR") fell to 13.6% from an Aug. 5 estimate of 16%, reflecting recent trade agreements with Japan, Malaysia, Thailand and South Korea, Fitch Ratings said on Wednesday.

The update mainly reflects the reduction of china's fentanyl-related tariffs to 10% from 20%. It also accounts for new tariffs on lumber, household furniture, heavy trucks and related parts.

Still, the decline could reverse, Fitch warned in its ETR Monitor, as the updated ETR does not reflect recent tariff announcements regarding pharmaceuticals, "which have been postponed indefinitely. Due to the subjective nature of determining the aluminum content of many products now included in updated guidance on aluminum and steel tariffs, this update excludes aluminum and steel derivatives used in vehicles, machinery, and metal packaging for food and chemicals."

Among U.S. trading partners, India faces the highest ETR at 35%, followed by Brazil (29.3%) and China (29.2%). China's ETR was about 41% before fentanyl-related tariffs were reduced to 10%.

The government shutdown has postponed the release of August and September data on actual import flows and duties paid, the report noted.

Earlier, China confirmed that it will suspend [https://seekingalpha.com/news/4515391-china-to-suspend-most-us-tariffs-after-trump-xi-meeting-soybeans-still-face-13-duty] retaliatory tariffs on U.S. imports following last week’s meeting between President Trump and his Chinese counterpart, Xi Jinping, including lifting duties on farm goods, though U.S. soybean imports will still carry a 13% tariff.

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