US President Donald Trump holds the chart next to U.S. Secretary of Commerce Howard Lutnick for his remarks on tariffs at Rose Garden in the White House in Washington, D.C. on April 2, 2025.
Carlos Barrier | Reuters
The tariff policy outlined on Wednesday by President Donald Trump appears to be set to raise the highest level of US import obligations for over 100 years.
The US has introduced a baseline 10% tariff on imports, but has also introduced rapid national fees to some major trading partners, including China. Country-specific fees appear to be related to the trade deficit the US has with each trading partner.
Sarah Bianchi, chief strategist in international political issues and public policy at Evercore ISI, said in a note to clients late Wednesday that the new policy would surpass the approximately 20% level set by the Smoot-Hawley tariffs law in the 1930s.
“It’s a very difficult and bearish announcement that is likely to be pushed up the US overall weighted average tariff rate to 24%, the highest in over 100 years and is likely heading towards 27% when the expected 232 is complete,” Bianchi wrote. “232S” is a reference to some sector-specific customs duties that can be added immediately.
JP Morgan’s chief US economist Michael Ferroli came up with a similar result when the team calculated the numbers.
“By our calculations, this takes an average effective tariff rate of just over 23%, from about 10% before today’s announcement. …The average effective rate could be even higher as the other section 232 tariffs (chips, pharmaceuticals, important minerals) are still in work.
The estimates from Fitch’s ratings are in the same range, with the report saying that tariff rates reaching the highest level since 1909.
Trump referenced the Smoot Holy Act in his Rose Garden remarks on Wednesday. The president said the issue was not a tariff imposed in 1930, but a previous decision to remove higher tariffs that existed in the early 20th century.
“If they had stayed with tariff policy, it would never have happened. It would have been a very different story. They tried to get back the tariffs to save our country, but it was gone. It was gone.
The full economic impact of the new tariffs will likely depend on how long they are and whether other countries will retaliate. President Trump and Treasury Secretary Scott Bescent have shown that if those trading partners change policies, national tariffs could fall.
JP Morgan’s global economist Nora Zentivany warned that if they persist, Trump’s tariffs could likely drive the US and the global economy into a recession this year.
