EU Tariffs: European Trade is Not Free

By Antonio Graceffo, PhD.

Europeans often criticize America for being protectionist or for raising tariffs against imports from the EU, in spite of the fact that the US runs a trade deficit with Germany and some of the other members.

Meanwhile, trade with the EU is not free. The US average tariff rate is 1.4% while EU average tariff rate against US and non-EU members is 11.4%.

In terms of agricultural tariffs, the above graph shows how the EU has an automatically adjusting tariff system which increases tariffs when world prices for agricultural products decreases. This keeps food prices high in Europe, while reducing US exports, and maintaining the US trade deficit with EU members.

This sliding scale nature of the variable levy is why the EU has been referred to as “fortress Europe” and represents one of many unfair trade agreements that other countries expect the US to just accept. Of course, their expectations will now become reality, under the new administration, who will probably extend an apology and a reduction of tariffs.

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