US President Donald Trump speaks while signing an executive order in the Oval Office of the White House to impose 25% tariffs on all US imports of steel and aluminum, broadening his trade restrictions to some of the country’s top trading partners.
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As President Donald Trump ratchets up the rhetoric over tariffs against top international trading partners, fears of unintended consequences for the U.S. and world economy are running high.
“This is a sledgehammer approach to trade negotiation,” said William George, director of research at ImportGenius.
But the simplest explanation for Trump’s approach — which ranges from tariffs on North American partners Canada and Mexico that may begin next month, to a broader reciprocal tariffs war around the world — can be found in the most basic data on the way goods move around the globe.
The average tariff the United States levies against the world is 2.71%. The world, in turn, tariffs U.S. goods, on average, at 6.7%, according to data from the Observatory of Economic Complexity and data analytics firm Datawheel.
“On average, the world imposes tariffs more than twice as high as those applied by the U.S. on imports,” said Gilberto Garcia-Vazquez, chief economist at Datawheel.
But that, too, leaves out important details, according to Garcia-Vazquez. “This broad comparison hides key differences: many countries impose significantly higher tariffs on products such as food, garments, alcohol, and tobacco to protect local industries or regulate consumption. These targeted tariffs highlight the strategic role trade policies play in global markets,” he said.
Trade experts expect Trump may exert the most immediate pressure against nations with the largest trade deficits with the U.S., and which have current high tariff levels on U.S. products.
Largest trade deficits with U.S., by nation
(in $billions, as of Dec. 2024)
China (-295.4)Mexico (-171.8)Vietnam (-123.5)Ireland (-86.7)Germany (-84.8)Taiwan (-73.9)Japan (-68.5)Korea, South (-66)Canada (-63.3)India (-45.7)
Source: U.S. Census Bureau
Average applied tariffs by major countries on U.S. exports shows India has the highest overall average tariff level, at 17%, followed by Argentina (13.4%), and South Korea (12%), according to the OEC. With an average tariff rate of 7.5%, China is No. 23, ranked globally.
The European Union has a 1.6% average applied tariffs on U.S. exports, while Canada imposes a 2% average tariff, and Mexico has an average tariff of 7%, though under the current North American trade deal, USMCA, most products traded between these three nations are excluded from tariffs.
Autos, drugs and chips
During his Oval Office presser with reporters last week, Trump indicated he would move forward with reciprocal tariffs, likely in April when an administration review is completed, including on autos, semiconductors, and pharmaceuticals. This week, Trump said he will tariff these industries at 25% to start, and raise tariff levels from there. Canada and Mexico tariffs could begin in March.
Amy Morgan, vice president of trade compliance for global supply chain research firm Altana, said in the autos sector, China’s tariff rate is generally higher, historically around 15%, but recently reduced for certain types of vehicles.
UNCTAD compiled specific tariffs data on U.S. exports of corn, autos, and motorcycles for CNBC.
Germany and Ireland, have an auto tariff of around 10%, implying a 25% tariffs on EU autos would be far in excess of a “reciprocal” level product to product. However, as Garcia-Vazquez explained, “This is not a tariff to tariff comparison. The Trump administration is adding VAT and other local taxes on top of the tariffs” in its calculations of what would be a level playing field and as part of its challenge to international taxation it deems to be “discriminatory.”
India has the highest tariff rate for autos, which can be upwards of 60%-125%, depending on the engine and costs, and motorcycle tariffs are as high as 100%, which has been a particular target of Trump’s claims of unfair trade.
Taiwan imposes tariffs ranging from 10%-30% on automobiles, depending on the engine size and type. Vietnam’s tariff on automobiles is around 33%.
Canada’s import tariffs on autos are typically around 6.1%, depending on the agreement under the most recent North American trade deal, USMCA.
Japan, Mexico, and South Korea have low to no tariffs on automobiles.
Tariffs on semiconductors and pharmaceuticals, the two other industries recently targeted in Trump’s comments, are generally low in countries with the largest trade deficits with the U.S. to support public health or the technology industry, Morgan said.
Pharmaceutical products are the top U.S. import from the EU, according to data from the US Trade Census analyzed by Import Genius. The value of EU pharmaceutical products imported into the U.S. in 2024 was $127 billion, including a significant percentage of the drug compounds used in the popular GLP-1 weight-loss drugs.
Tariffs on U.S. agriculture
Agriculture will also play a significant role in the new trade war. India outpaces the world in tariffs on American exports of corn (53%), followed by Thailand, at 23%, which also has high auto tariffs, at 74%, and on motorcycles, at 60%.
The top ten U.S. exports tariffed around the world, according to average tariffs data based on total dollar value, from the OEC and Datawheel, are:
Rice (25%)Milk (25%)Frozen bovine meat (24%)Bovine meat (24%)Processed tobacco (22%)Rolled tobacco (21%)Raw sugar (19%)Sheep meat (19%)Goat meat (19%)Poultry meat (19%)
U.S. exports approximately 26% of the corn from all corn-producing countries to the world a year, roughly $15 billion, and trade experts say a high tariff on the relatively lower-priced, popular ag export would be particularly detrimental to developing nations (the current average tariff on U.S. corn is 13%).
Trade and customs experts tell CNBC the complexity of the global customs system will only add to the uncertainty facing U.S. businesses as the world awaits reciprocal tariffs from the U.S.
“The global customs code system is massive,” George said. “Over 98% of the goods traded internationally are categorized in this system,” he said, referring to the Harmonized Commodity Description and Coding System, developed by the World Customs Organization. “Over 5,000 commodity groups and more than 200 countries and economies utilizing this system,” he added.
Knowing the tariff rates on U.S. goods imposed by countries around the world does give U.S. companies a good starting place for what reciprocal tariffs could be imposed on the products they import.
“One thing we know for sure is there’s a lot of upheaval ahead,” Morgan said. “Importers, logistics providers, and customs officials will face significant disruption as they navigate these new tariffs,” she added.
