Trump tariffs drive US effective tariff rate to 17%, customs revenue hits $50 billion
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Despite India being labeled the "tariff king," Fitch Ratings has estimated that the US effective tariff rate for all countries currently stands at 17% after the latest reciprocal tariff announcements, The Times of India reported. Before August 27, Indian goods faced an effective US tariff rate of 20.8%, including exempted products.In 2024, the latest year with data available from the World Trade Organization (WTO), India's simple average tariff was estimated at 16.2%, with agricultural products at 36.7% and non-agricultural goods at 13%. Following the February Budget, this average is expected to have declined further.According to the WTO database cited by TOI, the average US tariff in 2024 was 3.3%, with farm goods facing a 5% levy and non-agricultural products attracting a 3.1% import duty. However, additional duties exceeding 10% for most countries are set to push the average tariff higher. India and Brazil face an additional 50% tariff, while China and South Africa are in the 30% bracket.Though the US average tariff remains low—reflecting its long-standing support for low tariffs—certain goods face steep levies. For example, peanuts in shells have a Most Favoured Nation (MFN) duty of 54.6%, which will rise to nearly 105% for India and Brazil following the reciprocal tariffs . Peanut butter attracts a 44% customs duty, while various footwear categories face tariffs of 37.5% on an MFN basis.Other products with high duties include dates, apricots, and dried onions at around 30%, women's trousers and some tracksuits at 28.2%, and boys' trousers and bovine meat in the 26-27% range. Complex tariff structures apply to items like wristwatches, involving a mix of specific and ad valorem duties.The new tariffs are widely viewed as a revenue-generating measure by former President Donald Trump, with customs revenue hitting $30 billion (around Rs 2.5 lakh crore) in July. US Commerce Secretary Howard Lutnick told TOI in a recent interview that customs revenue is on track to reach $50 billion (approximately Rs 4.4 lakh crore), nearly double India's projected customs revenue for the 2025-26 fiscal year.With inputs from ToI
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