How High Are the Current US Tariffs? Economists Driven Crazy by Trump Did the Math!

Trump's ever-changing tariff policies are driving many economists and market participants, who seek to precisely calculate the impact of tariffs, to the brink of madness...

A series of intensive tariff policy proposals, adjustments, and temporary exemptions from the White House have left many investors and economists scrambling to "tear up reports." Of course, to date, this series of revisions has not completely altered an established fact brought by Trump's trade policy proposals:

US tariff rates are reverting to the past—a distant past, so far back that China was still in the Qing Dynasty...

According to recent estimates from industry insiders, the effective tariff rate imposed by the Trump administration on all US imports has reached 22%-27%.

The upper end of this range (27%) would push the US effective tariff rate above the level of 1903. Even at the lower end (22%), tariffs would reach their highest level since 1910.

One reason for the constant changes in economists' calculations is that Trump has actually made two tariff "concessions" since last week:

One was last Wednesday, the day the US bond market was in turmoil, when Trump announced a 90-day suspension of reciprocal tariffs on dozens of countries;

The other was last Saturday, when US Customs and Border Protection issued a new notice, excluding a series of products from the previously announced reciprocal tariffs, including communication equipment (smartphones), computers, semiconductor equipment, and integrated circuit devices. Although Trump later insisted that "no tariff 'exceptions' were announced, they were just moved to different tariff 'categories,'" and threatened that "semiconductor tariffs" would soon arrive, temporary exemptions have indeed occurred—related "reciprocal tariffs" on these electronic products paid after April 5 can even seek refunds.

According to estimates from the Yale Budget Lab, the tariff rate imposed by Trump on China (currently 145%) initially pushed the overall average effective tariff rate in the US to 27%, the highest level since 1903.

However, after the temporary reciprocal tariff exemption decision on electronic products was announced, this average effective tariff rate has actually pulled back.

Paul Ashworth, Chief North America Economist at Capital Economics, wrote in a report after the electronic product tariff exemption, "As a result, the overall effective tariff rate on US imports is currently 22%, still a significant increase from 2.3% a year ago, but lower than the previous day's 27%. "Specifically, although the tariff rate on China remains at 145%, once these exemptions are factored in, the actual average increase is now close to 106%."

We previously mentioned that the electronic products exempted from tariffs not only include the 125% reciprocal tariff Trump imposed on Chinese goods but also the 10% baseline tariff on imports from other countries. The only part of the related goods still affected by tariffs is the 20% tariff Trump initially announced on Chinese goods.

According to data compiled by Gerard DiPippo, Deputy Director of the Rand China Research Center, based on official US trade statistics for 2024, this exemption covers nearly $390 billion in US import value, with over $101 billion coming from China. DiPippo stated that overall, these exemptions include consumer electronics and semiconductors, which accounted for about 22% of US imports from China in 2024.

Of course, as Trump has repeatedly emphasized in recent days, he will soon announce tariffs on semiconductors, so these numbers may still undergo further changes.

US Commerce Secretary Lutnick also said last Sunday that smartphones, computers, and other electronic products, while not subject to "reciprocal tariffs," will be covered by semiconductor tariffs, which may be introduced in a month or two.

In any case, Trump's "childish" and "whimsical" tariff policy changes will only bring significant uncertainty to financial markets and increase the risk of the US economy falling into recession.

As Stuart Kaiser, Head of US Equity Strategy at Citibank, pointed out, the exemption for certain electronic products is "Step-1 towards progress, though still unclear." For now, "this is only a reduction or delay of tail risks, not their elimination."