Understanding the USA’s Tariff Rates in 1909 – Latest Update from Fitch
The recent tariff rates announced by the US administration have caught the attention of international credit rating agency Fitch Ratings. According to Fitch, these new tariffs have increased the country’s customs duties to the highest level since 1909.
The minimum 10 percent customs duty and higher tariff rates for the US’s trading partners, known as the “Salvation Day” tariffs, have been identified as factors contributing to the increase in default rates. US President Donald Trump has dubbed the date of April 2, when these mutual tariffs were announced, as “the Day of Liberation”.
It is projected that these amendments will raise the overall tariff rate of the US to 25 percent, a significant increase from the previously anticipated 18 percent. This surge in tariffs is expected to slow down the growth of the US economy, with growth rates estimated to be below 1.7 percent in March.
Consumer confidence indicators in the USA have been affected by the stock market fluctuation and a slowdown in consumer spending in the first two months of the year. The statement by Fitch also predicts that the increase in tariffs will lead to higher consumer prices and lower company profits.
Furthermore, the statement highlights concerns about the impact of these tariffs on business investments, with expectations of growth in Asia and other parts of the world deteriorating. The risk of a trade war was emphasized, with the possibility of escalating tensions and retaliatory measures from key trade partners.
Overall, Fitch warns that the increase in tariffs may have negative consequences for the US economy, outweighing any benefits for domestic companies in terms of competition. As the situation unfolds, governments may seek to negotiate better trade agreements with the US, but the risk of further escalation in trade tensions remains high.
