The Cost of Trading: Gobal Tariffs

The Three Scale tax map series has covered income tax, sales tax, property tax, estate tax and corporate tax.
This week we take a look at global “tariffs” or “trade tariffs”. These are taxes on imports and exports to a country, and can range from very low to very high, depending on the country and the item being imported and or exported. Businesses that engage in trade, have global offices, or have looked into expanding internationally, know about tariffs and that they can vary substantially from one type of good or service.



When you first glance at this map, you first notice many countries are colored green. These are countries with an average tariff rate of 0.1% up to 5.9%. The average global rate is 6.07% (the average of the countries for which we have data). On a global scale map, the map reader does not see many of the yellow color coded countries (those with a rate of 6.0% to 8.9%). This is because a number of smaller islands have these average rates, but since they are very small, we can’t make these colors visible on this map’s scale.
The median global tariff rate is 4.6% and the mode (the most common number) is 1.2%. This indicates that a relatively small number of countries with relatively high average tariffs are driving the higher global average rate of 6.07%.
The tariff rates in North America and Europe are relatively low, and reflect a number of free trade agreements enacted over the past several decades. Exporter to Africa, the Middle East and parts of South America pay a relatively higher tariff. In Iran and Zimbabwe, the tariff is the highest at 20% for both countries, but nearest each of these countries are those with much lower rates such as Turkey, Turkmenistan, South Africa and Namibia.
Two places with relatively high tariffs are Brazil and India. Given the large potential for increased trade between the United States and these two large countries with growing economies, we might predict downward pressure on tariffs over the next five to ten years.