Data on import tariffs are compiled by the World Bank and the World Trade Organization (WTO). Tariff analysis can be complicated, as different rates apply to different products from different partners. Moreover, the listed or “bound” rates often do not match applied rates. The tariff rankings listed below are based on the World Bank’s “weighted mean applied tariff” figures, which account for the volume of imports from different partners, as of 2020.
Key Takeaways
- Tariffs are taxes on imports imposed by a government as a protectionist strategy.
- Economists often discourage tariffs in favor of free trade since tariffs lead to price inefficiencies and costs to consumers.
- Less developed countries, such as those in the Caribbean and Africa tend to have the highest levels of tariffs.
- Developed countries tend to have lower tariffs, although this is not always the case.
- Tariffs are not the only variety of trade barriers: others include exchange controls, subsidies, fair trade laws, local-content requirements, and quotas on imports and exports
The 10 countries with the highest import tariffs as of 2020 are listed below. It is important to note, however, that reliable information is missing for dozens of countries and the last reported figures for some are before 2020.
Highest Tariffs
Source: World Bank, 2020 data
As the examples above indicate, less-developed countries tend to have the highest trade barriers. Developed countries are generally less restrictive. For example, 28 countries in the European Economic Area (EEA) have an applied tariff rate of 1.5%. This may not remain the case, however, as political opposition to pro-trade policies spreads in the developed world.
Bermuda
Bermuda’s weighted mean tariff had been fairly consistent at below 20% from 2007 to 2017, where it shot up to 103% in 2019, coming down to its current level of 24%. Bermuda uses the Harmonized Commodity Description and Coding System (2012) for its tariffs. The average rate for goods is 22% but is lower for food items; between 5% to 15%. Vehicles, depending on the price, have tariffs of 75% to 150%.
Belize
The Belize Customs and Excise Department accounts for 50% of Belize’s government’s annual revenue. The tariff schedule is derived from the Caribbean Community’s (CARICOM) Common External Tariff (CET). Tariffs range from 0% to 45%, depending on the good. The goods with no tariffs include food and medicine while the 45% level tariffs are applied to automobiles, boats, and live animals.
Lowest Tariffs
Below are the 10 countries with the lowest tariffs.
Source: World Bank, 2020 data
Tariffs vs. Free Trade
When Adam Smith published The Wealth of Nations in 1776, international trade was largely defined by extremely restrictive import tariffs and quotas. His influence has contributed to a consensus among economists that lowering barriers to trade encourages economic growth.
That consensus was particularly strong among Western economists in the second half of the 20th century, leading to a general decline in tariffs around the world.
The U.S. has a weighted mean tariff of 1.5%.
Many tariffs still exist, however, even among the most free-market countries. Japan, for example, favors its rice farmers through high import duties, and the U.S. does the same for its peanut farmers.
Nor are tariffs the only variety of trade barriers: others include exchange controls, subsidies, fair trade laws, local-content requirements, and quotas on imports and exports. Based on this broader view of trade barriers, the Fraser Institute compiled a ranking of countries based on openness to trade in 2019 (latest figures), as depicted below.
What Is the Result of High U.S. Tariffs on Imported Goods?
High U.S. tariffs on imported goods increase the prices of these goods. As a result, consumers end up paying higher prices for the goods. Alternatively, consumers can opt to purchase substitute goods that are domestically made, that are most likely to be cheaper.
Do Any Countries Have No Tariffs?
Yes, many countries do not have tariffs. Tariffs are not a blanket number on goods but rather tariffs are applied to specific products or industries. The World Bank reports tariffs on a weighted mean, and the countries that have no tariffs include Hong Kong (China), Macau (China), Sudan, and Brunei Darussalam.
Which Country Has the Highest Import Duty?
Bermuda has the highest weighted tariff at 24.1%.
The Bottom Line
Countries implement tariffs to protect their industries from foreign competition. This tactic is commonly seen in less developed countries that are still growing their industries.
Tariffs can hurt international trade, however, and increase the prices of goods for domestic consumers. Many countries and regions have established free trade agreements to abolish or reduce tariffs, which have helped facilitate trade, globally.