Fitch Ratings has updated the US Effective Tariff Monitor following the joint statement on US-China Economic and Trade Meeting in Geneva on 12 May, which reduces reciprocal tariffs.

Fitch estimates that the US effective tariff rate (ETR) is now 13.1%, a notable decline from 22.8% prior to the statement.

The 34% reciprocal rate imposed by the US on 2 April is suspended for 90 days, and the subsequent increase in the reciprocal rate announced on 8 and 9 April is cancelled.

While the tariff agreement is a significant de-escalation, a US ETR of around 13% was last seen in 1941 and remains much higher compared to 2.3% at the end of 2024.

The ETR represents total duties as a percentage of total imports and changes with shifts in import share by country of origin and product mix.

The US ETR for China remains the highest at 31.8%, reflecting duties imposed on China prior to 2 April, plus a 10% baseline tariff imposed on most countries. This is down from 103.6%. Japan, Mexico, Canada, Germany, which have the next highest exports to the US, have ETRs exceeding 10.5%.

(Fitch Ratings)