U.S. effective tariff rate (ETR) remains around 14.1% as increased steel and aluminum tariffs are offset by lower estimated duties on Canada, Mexico and the U.K., Fitch Ratings says. The ETR represents total duties as a percent of total imports and changes with shifts in import share by country of origin and product mix.

Fitch has updated the U.S. Effective Tariff Rate Monitor, its interactive tariff tool, to reflect higher steel and aluminum tariffs as well as the lower tariffs on U.K. auto imports. The U.S. raised steel and aluminum duties to 50% from 25% earlier this month but kept the rate for these imports from the U.K. at 25%. The U.S. has further granted the U.K. a reduction in auto tariffs to 10% for the first 100,000 vehicles imported each year, essentially covering current U.K. annual auto export volumes to the U.S. The U.S. has a 25% tariff on auto and auto parts imports for all other countries, with some exclusions for U.S. content in autos and auto parts compliant with the United States-Mexico-Canada Agreement (USMCA).

The workbook now provides information on the changes in ETR from month to month based on actual import volume and composition. The actual ETR is currently lower than the ETR estimate but will increase as imports further reflect higher tariffs over the course of the year. Our ETR estimate also assumes 2025 import volumes and product mix remain unchanged across all countries relative to 2024.
With this update, we have also provided a more granular breakdown on tariff and duty estimates for Canada and Mexico. Given the tariff exemptions for USMCA-compliant goods, Canada and Mexico are ramping up efforts to demonstrate USMCA compliance for goods that were previously tariff-free for reasons outside of the USMCA. The monitor shows scenarios in which various levels of formerly tariff-free goods are reclassified as USMCA compliant and indicates their effect on the ETR.

Fitch’s ETRs estimates for Canada and Mexico have decreased to around 7.5% and 9.5% from 10.9% and 12.1%, respectively, as these countries demonstrate greater export compliance with the USMCA. Fitch assumes that about half of previous tariff-free imports will ultimately be reclassified as USMCA compliant in order to avoid duties. This assumption results in an ETR of 6.0% and 8.9% for Canada and Mexico, respectively. The new higher steel and aluminum tariffs add 1.5% and 0.6% to our ETR estimates for Canada and Mexico, respectively.

The ETR estimate for China is the highest at 41.4%, up slightly from 39.1% due to the hike in steel and aluminum tariffs. The U.S. maintains a 10% baseline tariff on most countries but may impose much higher tariffs, first announced on April 2, on countries that have not made a new trade deal by July 9.

The U.S. Effective Tariff Rate Monitor calculates the ETR on imports from all U.S. trading partners and quantifies current duties. The spreadsheet allows users to adjust tariff calculations, such as changing reciprocal rates and import amounts, to create hypothetical tariff scenarios. The tool will be updated whenever significant changes in U.S. tariff policy occur.
Source: Fitch Ratings