Kudlow Overstates American, Chinese and European Tariffs

WHAT WAS SAID

THE FACTS

Kudlow was seeking to justify President Donald Trump’s trade dispute with China and the European Union with a dramatic — but overstated — comparison of tariffs that each impose.

Even among major economies, the United States does not have the lowest tariffs in the world, though they are among the lowest.

The president’s 2018 economic report compared the average tariffs that six high-income countries, eight emerging economies and the European Union imposed on most-favored nations in 2016.

According to the report, the United States charged most-favored nations an average tariff of 2.4 percent on manufacturing products — which is similar to the 2.5 percent Kudlow cited. But Australia’s and Japan’s tariffs were even lower, at 1.3 percent and 1.2 percent.

Tariffs on all products imposed by the United States against most-favored nations ranked second lowest, at 3.5 percent. Again, Australia’s were lower, at 2.5 percent. (These figures do not take into account countervailing or anti-dumping duties — tariffs that countries impose on what they deem unfair trade.)

These numbers are consistent with a report from the World Trade Organization covering 2016. And the World Bank’s estimates for average tariffs on most-favored nations are similar: the United States at 2.8 percent and Australia at 2.7 percent in 2016, the most recent data available.

Beyond imports from most-favored nations, several other countries charge lower tariffs than the United States.

The United States charged an average tariff of 2.9 percent on all imported products, according to the World Bank. That’s higher than several major economies: 2.3 percent in Australia and 2.5 percent for Germany, Denmark, Austria, the United Kingdom and France.

The World Bank also reports weighted averages — accounting for the amount of goods imported and the tariffs imposed on each. By this measure, the United States’ weighted average tariff of 1.7 percent was higher than Canada’s 1.6 percent and Australia’s 1.2 percent.

For Kudlow’s claims about trade barriers imposed by China and the European Union to be accurate, he would need to selectively apply different metrics in each case.

The 14 percent figure that he cited for Chinese tariffs is close to the 15.5 percent that, according to the 2018 White House report, Beijing imposes on average against agricultural products.

But overall, China imposed a tariff of 9.9 percent, according to both the White House report and the World Trade Organization.

Separately, the World Bank estimated that China imposed an average tariff of 7.9 percent, a weighted average of 3.5 percent against all goods and 4.3 percent on products from most-favored nations.

Since the 1990s, the United States, the European Union and China have all lowered their tariffs. Whether their tariffs have declined or increased in recent years depends on which metric is used.

In recent years, the simple average tariff that China imposes has risen slightly, according to the World Bank. But its weighted average tariff overall and for most-favored nations have steadily declined.

The European Union’s simple average tariff declined from 2015 to 2016, while its weighted average tariff overall and for most-favored nations recently increased.

The same trends also exist in the United States. Its simple average tariff has dropped, but tariffs on products from most-favored nations and the overall weighted average tariff have increased.

The Trump administration has not released updated tariff statistics since the White House economists’ report earlier this year.

Updated figures for 2018 would almost certainly show a rise in U.S. tariff rates because the Trump administration has imposed new tariffs on a variety of imported products this year.