ECONOMYNEXT – Fitch Ratings has said it was revising its US Effective Tariff Rate (ETR) Monitor to 19.4% from 14.1% due to the higher reciprocal tariffs and duties coming into force on August 1.
“The threatened tariff increases represent a significant increase from existing tariffs,” the ratings agency said.
“The ETR reflects our assumption that about half of previous tariff-free imports will ultimately be reclassified as USMCA compliant.”
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 said.
The statement is reproduced below:
US Effective Tariff Rate May Jump to 19.4% with New Reciprocal Levies
Fitch Ratings-New York-17 July 2025: Fitch Ratings has updated the U.S. Effective Tariff Rate (ETR) Monitor, its interactive tariff tool. The U.S. ETR will jump to 19.4% from 14.1% on the basis that higher reciprocal tariffs and copper duties come into force on Aug. 1, 2025, in line with the rates specified in recent letters and announced deals.
President Trump has also indicated that tariffs on semiconductors and their electronic derivatives and pharmaceuticals may go into effect on Aug. 1, following the conclusion of the outstanding Section 232 investigations. The ETR Monitor contains a scenario for an additional 25% tariff on these imports, which would further increase the total ETR to approximately 23.7% from 19.4%.
The president extended the pause on country-specific reciprocal tariffs announced in April and sent letters to countries setting forth new tariff rates, which range from 25% to 50%. For now, the U.S. maintains a 10% baseline tariff for most countries that have not received letters, although Trump stated he may set a blanket tariff of 10% to 15% for around 150 countries. This presents additional upside risk to current ETR levels. New trade deals have also been announced in the last week for Vietnam and Indonesia that establish reciprocal tariff rates of 20% and 19%, respectively.
The threatened tariff increases represent a significant increase from existing tariffs. Along with the 50% duty on all copper imports, the newly announced tariffs on Canada and Mexico of 35% and 30%, respectively, would cause the ETR for these countries to rise to 11.7% and 13.1% from 7.5% and 9.5%, respectively. The ETR reflects our assumption that about half of previous tariff-free imports will ultimately be reclassified as USMCA compliant.
Reciprocal tariffs on European Union goods would increase to 30% from 20%, resulting in ETRs for individual EU countries that range from around 12% to over 30%. 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.
Bangladesh would have the highest ETR under the Aug. 1 tariff regime at around 50%. This incorporates the 35% rate announced in the tariff letters and the 15% rate that was already in place heading into 2025. The ETR approximates the announced tariff rate as Bangladesh does not benefit from tariff carveouts. There are no changes to the reciprocal tariff rate for China, and the ETR for China is unchanged at 41.4%.
The updated U.S. ETR Monitor provides a breakdown of import volumes and duties by sector through 2025 for the U.S.’s top trading partners: China, the European Union, Japan and Vietnam, in addition to those provided for Canada and Mexico.
The U.S. ETR Monitor calculates the ETR on imports from all U.S. trading partners and quantifies current duties. The tool allows users to assess tariffs scenarios by adjusting sector and country rates as well as import amounts. The ETR Monitor will be updated whenever significant changes in U.S. tariff policy occur.
(Colombo/Jul18/2025)
