US tariff collection falls short as implementation issues bite
Between April 5 and June 30, when the UK's trade deal with the US came into force, the vast majority of British exports to the US faced a minimum 10 per cent tariff.
However, data from the US Census Bureau analysed by The Times showed that the country's Customs and Border Protection agency (CBP), responsible for administering President Trump's tariffs, collected duties equivalent to an average tariff rate of 6.2 per cent in April, rising to 7.9 per cent in June.
A recent report from Oxford Economics found that in July the ratio of duties paid on imports was 10.5 per cent, well below its estimate for the effective US tariff rate of 18.2 per cent.
Adam Slater, the author of the report, said there were probably two main reasons for the gap. Firstly, the fact that some goods in transit could have been exempted from tariffs and, secondly, that the US's duty collection systems were not quite up to speed.
'It's a lot more complicated with a system of exemptions,' Slater said. 'If you just had across-the-board import tariffs with no exception for all classes of products, it would probably be quite a lot easier to collect the tariffs quickly.'
The most significant impact of the inconsistent collection of tariffs has been to further complicate the picture of how the tariffs are affecting the US economy. Slater said: 'This just pushes the full impact economically [of the tariffs] down the road even further, by however many months it may be; we don't really know at this point.'
A separate report by the Federal Reserve Bank of Richmond found that the CBP appeared to collect no duties at all from $74 million of imports of aircraft between 2,000kg and 15,000kg from Canada in May, despite the product facing a US tariff of 25 per cent at the time.
The bank attributed the shortfall between declared and actual tariffs to 'implementation frictions' in their rollout, due to shipment timing issues, deferred payments and delays in customs systems adapting to the new tariff schedule.
For some UK exports, the US still appears to be receiving considerably less in levies than it should be. According to the US Census Bureau, the average tariff rate on British gin exports to the US was about 8 per cent in June, below the 10 per cent rate the products nominally face.
Jose Sedano, the commercial director of Glenrinnes Distillery in Scotland, which makes Eight Lands Vodka and Gin, said that while he and his American counterparts had paid a 10 per cent duty, it had been charged on two different bases over the past three months.
'I'm sure if you ask different customs authorities in different ports of entry, you'll get different answers,' Sedano said. 'I have been dealing with international trade for the best part of 30 years and tariffs are always a nightmare in every country in the world.'
Nonetheless, the US has still raised more than $100 billion from tariffs this year, with census data suggesting that British companies contributed about $1 billion of that between April and June.
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