Unews World
NEW DELHI: For all the noise over India being the tariff king, the US effective tariff rate for all countries is now estimated at 17%, Fitch Ratings has estimated after the latest reciprocal tariff announcements. The effective rate that Indian goods will pay to enter US before Aug 27 was estimated at 20.8%, including exempted products.In 2024, the latest period for which data is available with WTO, India’s simple average tariff was estimated at 16.2% – 36.7% for agricultural products and 13% for non-agricultural goods. Following the Budget in Feb, the average is estimated to have come down further.
According to the WTO database, the average US tariff in 2024 was 3.3% with farm goods facing a 5% levy, while non-agri products attracting 3.1% import duty. But with additional duties upwards of 10% for most countries, the average tariff is set to jump. In case of India and Brazil, the additional tariff will be 50%, while China and South Africa are in the 30% bracket.While the average tariff in the US may be low – after all, for decades it was the biggest champion of low tariffs – it does have goods which attract high levies.For instance, certain types of peanuts in shells attract 54.6% duty at MFN rate, which after the “reciprocal tariffs” will rise to nearly 105% for India and Brazil. Similarly, peanut butter attracts 44% customs duty in the US and several types of footwear see tariffs of 37.5% on MFN basis.Dates, apricots and dried onions are in the 30% range, while several types of women’s trousers and some tracksuits face 28.2% duty. Boys’ trousers and bovine meat are in the 26-27% range.There are complicated ones too such as wristwatches where there is a mix of specific levies and ad valorem rates as is the case with several other items.The new tariffs are seen to be a custom revenue generating move by Trump with the tax yielding $30 billion (Rs 2.5 lakh crore) in July. In an interview, US commerce secretary Howard Lutnick on Thursday said that customs revenue is headed to the $50-billion mark (Rs 4.4 lakh crore) – almost twice India’s projected customs revenue for govt for 2025-26 financial year.
