President Trump’s tariff policy proposals, tweaks, and temporary reprieves have left investors and economists scrambling to nail down the precise impacts of this overhaul of America’s trade relationships.
But this series of revisions hasn’t yet changed one clear implication of the president’s policy proposals as they stand today: We’re going back in time. Way back.
Current estimates of the effective tariff rate for all US imports range from 22% to 27%.
The high end of this range would put tariffs above levels last seen in 1903. At the lowest, tariffs would be the highest since 1910.
Read more: The latest news and updates on Trump’s tariffs
Over the weekend, news broke of a temporary electronic exemption on some imports from China. It was the latest in what’s been a series of carve-outs or pauses after Trump unveiled sweeping reciprocal tariffs on April 2.
Last week, Trump pivoted on enacting reciprocal tariffs on nonretaliatory countries, deciding to place the additional levies “on pause.” Simultaneously, the president doubled down on his trade war with China.
The tariff rate on China — now 145% — initially pushed the overall US average effective tariff rate to 27%, the highest level since 1903, according to an estimate from Yale’s Budget Lab.
But just a few days later, Trump announced exclusions for smartphones, computers, semiconductors, and other electronics, which economists described as a deescalation between the two countries.
Read more: What Trump’s tariffs mean for the economy and your wallet
“The upshot is that the overall effective tariff rate on US imports now stands at 22%, still up a lot from 2.3% last year but down from 27% yesterday,” Paul Ashworth, chief North America economist at Capital Economics, wrote in a Saturday note following the electronics announcement.
“The increase in the headline tariff rate on China specifically remains at 145%, but the effective increase once those exemptions are accounted for is now closer to 106%.”
Yale’s Budget Lab has yet to reduce its 27% estimate.
The Goldman Sachs economics team led by Jan Hatzius maintained their prior forecast following the latest developments, writing in a Sunday client note: “The effective US tariff rate is still slated to rise by 15 percentage points as Trump aims to incentivize domestic production and return manufacturing jobs to the US.”
Wall Street has the current tariff rate pegged between 2% and 3%.
As has been the case for much of Trump’s tariff rollout, the White House is still sending mixed messages.
