The latest round of tariffs the United States is imposing on China went into effect yesterday. You can find that list here. Everything from Goats, Sheep, and Chicken to Ginger, Curry, and Peanuts is being hit with a tariff. What this means for the American consumer is that all these products are going to become more expensive over time. The average tariff rate with China when the current administration took office was 3.1%. As of yesterday, the rate has increased by 584% bringing the new average rate to 21.2%. One of the initial objectives of the increased tariff rate with China was to stop China from forcing American companies to share proprietary information with the Chinese government. China responded to the new tariffs by filing a complaint with the World Trade Organisation. China also stated that the new tariffs contradict a verbal agreement President Trump made at the G20 meeting with Chinese President Xi Jinping.
Tariffs in the United States have been around since 1789 and have played an important role in the U.S. foreign trade policy as a source of income. The main source of Federal revenue in the United States up until 1914 was tariffs. Tariffs in the United States started in 1789 when Congress passed the tariff act which incurred a 5% tariff on all imports. By 1812 the average tariff rate increased to about 12.5%. In 1812 the tariff rate was increased to 25%. By 1820 the average tariff rate had increased to 40%. By 1870 the tariff rate had increased to 44%. In 1913 Congress changed tariff policies by passing The Underwood Tariff or Revenue Act of 1913 which re-established a federal income tax and lowered tariff rates across the board. The tariff rate has continued to decline ever since. The current average tariff rate in the United States is 2%.
Please see the below table which shows how tariffs have changed since 1789 in the United States:
|Year||Tariffs as a percentage of imports|