Average US tariffs at highest level since 1938

US trade policy changes almost weekly, if not daily, according to an analysis by visualcapitalist.com, which notes that while Trump imposed heavy reciprocal tariffs on about 100 countries last week, on April 9 he announced a 90-day break for countries that did not retaliate. The general 10% tariff on US imports, however, remains in place.

In 2025, the average US import tariff rose to 14.5% - the highest level in almost 90 years, more precisely since 1938, according to the analysis, which presents these averages throughout history, based on data provided by the Tax Foundation. By comparison, in 2024, the average U.S. tariff rate was 2.5%, slightly lower than that of the European Union, China, and several other major economies around the world.

As trade tensions escalate, tariffs on China have risen to 125%, and China's tariffs on U.S. goods now stand at 84%. In response, market volatility has spiked, given the unpredictable nature of Trump's trade policy.

According to the source, in the late 19th century, in 1890, under the presidency of William McKinley, the average U.S. tariff rate was 29.6%. At that time, tariffs were used to protect American industry and raise government revenue, in a time when income taxes did not exist. As global trade liberalized after World War I, tariffs fell and the U.S. government introduced higher income taxes.

However, tariffs rose again in response to economic instability. In 1922, the Fordney-McCumber Act raised average tariffs to 15.2% to protect American manufacturers and farmers. During the Great Depression, the Smoot-Hawley Tariff Act of 1930 raised tariffs even higher-to 19.8%-in an effort to protect jobs and domestic industries.

In the following decades, tariffs fell amid multilateral trade agreements aimed at eliminating trade barriers. Among the most important are the General Agreement on Tariffs and Trade of 1947 and the North American Free Trade Agreement of 1994, which virtually eliminated tariffs between the United States, Canada, and Mexico.

According to the cited source, in 1994, the average of customs duties imposed by the US was 3%, in 1995 - 2.5%, and in 1996 - 2.3%. In 2005, it dropped to 1.4%, in 2008 - to 1.2%, and in 2021 it reached 3% again. In 2022-2023 it was 2.8%, respectively 2.4%.

• IMF: "Trade tensions can lead to stock market crashes"

Major geopolitical risk events, including trade tensions, can trigger large corrections in stock prices, the International Monetary Fund (IMF) warned in a report published yesterday, Reuters reports, according to Agerpres.

In turn, these stock price corrections can threaten financial stability, the IMF said in a chapter published in advance of its upcoming Global Financial Stability Report.

The IMF did not specify which events it was referring to, such as the sweeping tariffs announced in recent weeks by US President Donald Trump. But it said risks such as conflict, war, terrorist attacks, military spending and trade restrictions have increased significantly after 2022.

In a separate blog post, the IMF urged financial institutions to hold sufficient capital and liquidity to help them withstand potential losses from geopolitical risks, and advised them to use stress tests and other analyses to identify and manage such risks.

In the report, the IMF points out that its analysis shows that high-risk events such as wars, diplomatic tensions or terrorism can lead to an average drop in stock prices of one percentage point each month, across all countries, and an average drop of 2.5 percentage points for emerging markets.

International military conflicts, such as the Russian invasion of Ukraine in 2022, are the events with the highest risks, leading to an average drop of five percentage points in stock returns each month, double the level of other geopolitical risk events.

The IMF also shows that economic uncertainty increases the risk of large and unexpected losses in investment portfolios, which in turn increases the risk of stock market crashes. Increased geopolitical risks can also lead to higher sovereign risk premia and could also be reflected in other economies through trade and financial links.

In a blog post, the IMF analyzed the impact of U.S. and Chinese tariff measures from 2018 to 2024, noting that some of the major announcements led to stock market declines in both countries.

The IMF is set to release the full report at its spring meeting next week. That meeting is likely to be dominated by Trump's tariffs, Reuters concludes.