Tariff rates remain the highest since 1934, even after trade agreements with the United Kingdom and China

[EUROPE] The average tariff rate imposed by the United States on imported goods remains at its highest level since the 1930s, even after recent trade agreements with China and the United Kingdom, according to a report released Monday by the Yale Budget Lab.

The report states that the current U.S. average effective tariff rate stands at 17.8%—the highest since 1934. The figure accounts for the latest policy developments, including the bilateral deals announced in recent days.

This sustained elevation in tariffs underscores a fundamental shift in U.S. trade strategy over the past decade. Rather than pursuing broad multilateral agreements, U.S. trade policy has increasingly favored bilateral negotiations and sector-specific protections, a model often described as “managed trade.” While this approach is designed to shield domestic industries, it has also sparked tensions with key partners such as the European Union and China.

The report notes that the average effective tariff rate has climbed by 15.4 percentage points compared to levels before former President Donald Trump’s second term.

According to the Yale Budget Lab, current tariffs are expected to cost the average American household approximately $2,800 in the near term. The report does not provide a specific time frame for this estimate.

Economists have raised concerns about the distributional effects of the tariff regime, warning that lower- and middle-income households bear the brunt of these costs. These groups typically allocate a larger portion of their budgets to imported consumer goods like clothing, electronics, and vehicles. A 2023 study from the Peterson Institute for International Economics described tariffs as a regressive tax that can worsen income inequality, despite their protective intent.

In a significant move on Monday, U.S. officials agreed to reduce tariffs on Chinese imports to a total of 30% for a 90-day period—down from previous levels of at least 145%—as trade talks continue. China, in turn, lowered its tariffs on U.S. goods to 10%, a sharp drop from 125%.

Separately, President Trump announced a trade arrangement with the U.K. on Thursday. While lacking detailed provisions, the deal preserves a 10% tariff on U.K. imports, with a concession that the first 100,000 vehicles imported from the U.K. will be subject to a 10% duty instead of the standard 25%.

Though limited in scope, the U.K. agreement marks a broader strategic effort to strengthen post-Brexit trade relations. Analysts say the deal could lay the groundwork for a more robust transatlantic trade partnership, particularly as Washington seeks to counter Beijing’s growing influence in global commerce. Critics, however, warn that even reduced tariffs in key industries—like automobiles—may curb potential long-term economic benefits.

The White House has also maintained a 10% blanket tariff on imports from most major trading partners, with additional levies targeting specific products such as steel, aluminum, and vehicles, including goods from Canada and Mexico.

Steel and aluminum duties, first introduced in 2018 on national security grounds, continue to generate debate. While some U.S. producers have seen gains, businesses in manufacturing and construction sectors report increased input costs and supply chain disruptions—issues that are especially acute as federal infrastructure spending ramps up under the Biden administration.

Before the new China and U.K. agreements, the average U.S. effective tariff rate stood at 28%, the highest since 1901, the Yale Budget Lab estimated in an earlier analysis released April 15.

The drop in that rate is “almost entirely due to the lower rates on Chinese imports,” the latest report states, adding that the U.K. agreement has had “minimal effects” on the overall average.

Economists anticipate that both consumers and businesses will adjust their purchasing patterns in response to elevated import costs—particularly for Chinese goods. After factoring in such behavioral changes, the average effective tariff rate is projected to fall to 16.4%, still the highest level since 1937, according to Yale researchers.

However, the timing of these shifts remains uncertain. “Some changes may occur rapidly—in a matter of days or weeks—while others could take significantly longer,” the report concluded.