U.S. Tariff Historical Overview

U.S. Tariff Historical Overview

April 3, 2025

The United States has just implemented the most sweeping tariff reform in over 100 years, signaling a major shift in trade policy with wide-reaching implications for markets and global commerce. Here’s an overview.

In the following slides, we explore the often-misunderstood topic of tariffs and their historical and modern implications on markets, government revenues, trade policy, and investor sentiment. Understanding how tariffs work—and how markets have historically responded—can provide valuable perspective during turbulent times. As always, we aim to equip you with clear, actionable insights to help navigate uncertainty. We have been moving hundreds of millions into money markets while diligently watch the trends and approach this new season cautiously.

What are Tariffs?

Tariffs are taxes imposed on imported goods, primarily used to protect domestic industries, influence trade policy, and generate revenue. While they can raise consumer prices, they also impact broader economic dynamics and global trade relationships.

Tariffs During Trump’s First Term

Despite widespread concerns during the 2017–2020 tariff escalations, inflation remained contained and markets continued to rise—underscoring how markets can absorb policy shocks over time.

Average Effective Tariff Rates Since 1790

U.S. tariff rates have steadily declined over the last century due to evolving trade agreements and globalization, reflecting a long-term shift toward freer markets.

Tariff Revenue as a Share of Total Federal Receipts

Once the government’s primary revenue source, tariffs now make up a small fraction of federal income, a shift that began after the 16th Amendment introduced income taxes.

Total U.S. Tariff Revenue (2014–2024)

 

Tariff revenue surged post-2017 but has since tapered off, reflecting adjustments in global trade patterns and domestic policy shifts.

U.S. vs. Top 10 Trading Partners – Tariff Rates

The U.S. maintains a relatively low average tariff rate compared to major trade partners, with India, China, and Brazil imposing notably higher barriers.

Largest Import Partners by State

Though Mexico leads overall U.S. imports, many individual states rely more heavily on Canada, showing regional variation in trade dependencies.

Largest Export Partners by State

Canada remains the dominant export destination for U.S. goods, though other countries like Mexico, Brazil, and China are key partners for specific states.

Trade as a Share of State GDP

Trade’s importance varies significantly across states, with Louisiana being the most globally integrated due to its energy exports.

Shifting Trade Patterns

Recent tariffs and policy changes have altered import patterns—Mexico now tops the list of U.S. suppliers, overtaking China.

Top U.S. Imported Products by Country

Canada and Mexico dominate in traditional goods (cars and oil), while China leads in tech imports such as phones and computers.

Exports as Share of GDP – U.S. vs. Trade Partners

The U.S. is less export-reliant compared to partners like Germany or Mexico, highlighting its more domestically driven economy.

Conclusion:

As market conditions evolve and headlines bring uncertainty, remember: our investment process is grounded in data, guided by trend-following research, and built to endure. Our patented models are not about reacting to noise but navigating with clarity—even in storms. While no one can time the markets, we have hundreds of millions positioned in cash earning 4.1% and are poised to deploy it strategically as short-term, medium-term, and long-term trends turn positive.

As Warren Buffett said, “Find a trend, throw yourself in front of it, and you will stay wealthy.” We encourage you trust the instrument panel of tested strategies that prioritize downside protection, capitalize on opportunities, and land this plane safely and on-time for your long-term success. If you have further questions, we welcome your call.

Best regards,

Cliff M. Robello, CFP®, ChFC

Sheri Cabral, President

CMR Financial Advisors | (808) 537-2912

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