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David Sparks Ph.d Tariffs
by David Sparks Ph.d, click here for bio

Program: Idaho Ag Today
Date: June 04, 2019

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Tariff Revenues Up Sharply. Customs duties are tariffs, or taxes, placed on goods in international commerce. Tariffs may be levied on imports or exports and are designed to protect the local economy by limiting imports or deterring the export of certain domestically produced items. According to the U.S. Trade Representative, the U.S. has a trade-weighted average tariff rate of 2% for non-agricultural goods, one-half of which enters the U.S. duty-free, i.e., without a tariff. On average, the U.S. imports approximately $2.2 trillion in goods each year, generating approximately $31 billion in customs duties. The U.S. Department of the Treasury's Monthly Treasury Statements provide information on customs duties.

U.S. Tariff Revenues

The Trump administration took the first step in its efforts to rebalance U.S. and global trade in January 2018 by raising customs duties on solar panels and washing machines. In March 2018, the U.S. introduced 232 national security tariffs on steel and aluminum. Beginning in July and August, the U.S. imposed tariffs on $50 billion of goods imported from China, followed in September by tariffs on an additional $200 billion worth of Chinese goods. Most recently, tariffs on $200 billion in goods imported from China were increased from 10% to 25% and more tariffs could be forthcoming as the administration is considering targeting an additional $300 billion worth of Chinese products. (For more details on the administration's overall approach to the tariffs, see a previous Market Intel, Tariff Motivation 101, Reviewing the U.S. Trade Deficit.)

As a direct result of these actions, U.S. tariff revenues have nearly doubled. In 2018 the U.S. collected a record-high $50 billion in customs duties. During the first four months of 2019, Treasury Department data reveals customs duties totaled $22 billion, up 78% from prior-year levels, and reaching a high of $6.6 billion in January 2019. Assuming the current pace of tariff revenue collections continues, the U.S. will collect nearly $72 billion in customs duties in 2019 – topping the previous record by $22 billion. Figure 1 highlights U.S. tariff revenue collections.

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