International Trade Theory and Policy
by Steven M. Suranovic

Trade 10-1A 1996

Selected US Tariffs - 1996

The most recent tariff schedule in the US was implemented upon completion of the Uruguay Round of GATT negotiations in December 1993. The table below contains a selection of the tariff rates specified in the US HTS. The collection of these tariffs is the responsibility of the US customs service. The complete US HTS is available at the US International Trade Commision web site .

A number of things are worth noting about the tariff schedule in the US. First, many goods (perhaps most goods) have zero tariffs applied as with coffee. The average tariff rate in the US in 1996 was about 2%-3%. The non-MFN tariff schedule generally applied to those countries who are not members of the WTO, however, some countries such as China, are provided MFN status by the US Congress even though they are not yet WTO members. Some other countries are provided special treatment and thus are not subject to the same tariffs shown above. For example, the US has signed free trade agreements with Canada, Mexico and Israel which were still in the process of implementation as of 1996. The US also provides special treatment to many less developed countries under the Generalized System of Preferences (GSP) program of the GATT and to members of the Caribbean "Caricom" community.

One interesting feature of the tariff schedule is the degree of specificity of the products in the HTS schedule. Besides product type, categories are divided according to weight, size or the time of year. Note especially the description of ceramic tableware and motorcycles.

Tariffs vary according to time of entry as with grapes and grapefruit. They also vary with different components of the same product as with watches. Note also that watches have both specific tariffs and ad valorem tariffs applied. The tariff rates themselves are typically set to several significant digits. One has to wonder why the US charges 8.8% on pearls rather than an even 9%. Much worse is the tariff on cane sugar with seven significant digits.

One issue worth considering is the cost of maintaining such a complex tariff schedule. Not only does the customs service incur administrative costs to properly categorize and measure goods and services entering the country, but foreign firms themselves must be attuned to the intricacies of the tariff schedule of all of the countries to which it exports. All of this requires the attention and time of employees of the firms and represents a cost of doing business. Luckily, many, if not most, countries of the world, use the same harmonized tariff schedule. This implies that ceramic tableware measurements will be the same whether plates are exported to the US or to France, although the tariffs rates charged will, of course, differ. These administrative costs are rarely included in the evaluation of trade policies.

Table I Selected Tariffs in the US 1996
HTS Code Description MFN Tariff Non-MFN Tariff

0805.40.40

0805.40.60

0805.40.80

Grapefruit 2.1¢/kg (Aug-Sep)

1.7¢/kg (Oct)

2.8¢/kg (Nov-Jul)

3.3¢/kg
0806.10.20

0806.10.40

0806.10.60

Grapes, Fresh $1.32/m3 (Feb 15-Mar 31)

Free (Apr 1-Jun 30)

$2.01/m3 (any other time)

$8.83/m3
6912.00.45 Ceramic tableware; plates not over 22.9 cm in maximum diameter and valued over $6 per dozen; plates over 22.9 but not over 27.9 cm in maximum diameter and valued over $8.50 per dozen 4.5% 55%
7116.10.25 Cultured Pearls 8.8% 110%
8711.20.00 Motorcycles, With reciprocating internal combustion piston engine of a cylinder capacity exceeding 50 cc but not exceeding 250cc 2.2% 10%,Free
8712.00.15 Bicycles having both wheels not exceeding 63.5 cm in diameter 11% 30%, 11%
1701.11.05 Cane sugar: 1.4606¢/kg less .020668¢/kg for each degree under 100 degrees but not less than .943854¢/kg 4.3817¢/kg less .0622005¢/kg for each degree under 100 degrees but not less than 2.831562¢/kg
6404.11.20 Sports footwear; tennis shoes, basket-ball shoes, gym shoes, training shoes and the like:Having uppers of which over 50percent of the external surface area is leather. 10.5% 35%
9506.31.00 Golf Clubs 4.7% 30%
9101.11.40 Wrist watches 51 each + 6.25% on case and strap + 5.3% on battery $2.25 each + 45% on case and strap + 35% on battery
8517.21.00 Fax Machines 4.7% 35%
0901.21.00 Coffee, non-decaffeinated Free Free

International Trade Theory and Policy - Chapter 10-1A96: Last Updated on 2/13/07

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