US Exporters Face Higher Tariffs in China While Others' Tariffs Fall

Before the U.S.-China trade war began, all countries that exported goods to China faced an average 8 percent tariff, according to a recent analysis from the Peterson Institute for International Economics. But now, U.S. exports to China are taxed on average at 20.7 percent, while German, Asian and Canadian producers are facing an average tariff of 6.7 percent.

Many news outlets noted that China reduced its tariffs on autos from 25 percent to 15 percent for all exporters except the U.S. -- because of U.S. tariff hikes, China decided U.S.-made cars would be subject to a 40 percent tariff. After a thawing, the U.S. cars were given the same rate as all other countries -- and that has continued, even after talks broke down (see 1812140002).

But PIIE co-authors Chad Bown, Euijin Jung and Eva Zhang wrote that at the same time auto tariffs were lowered, China cut tariffs "on 1,449 other consumer goods like farm and fish products, cosmetics, clothing, and home appliances. On November 1 it reduced duties on 1,585 industrial products, including chemicals and machines."

"With the exception of autos, aircraft, and pharmaceuticals, there is now a sizable difference between the tariffs facing US exporters and those facing exporters elsewhere," the authors said.

"This is not good news for US exporters. China’s retaliatory tariffs put them at a disadvantage relative to local firms, which obviously don’t have to pay any border taxes. But reducing tariffs on imports from other countries means US exporters also face an increasing disadvantage relative to competitors in Canada, Japan, Europe, and elsewhere," they said.