US Tariffs Return to 1909 Levels

US tariffs have returned to levels not seen since 1909, a change that is expected to slow the country's GDP growth, lead to faster inflation, and decrease corporate profits. The negative impact on the economy is expected to outweigh any benefits that American companies might gain from increased protectionism, according to a report from the international rating agency Fitch Ratings.

“Our assessment indicates that these changes will raise the average effective tariff rate in the US by about 25%, significantly up from the 18% we had forecast for March 2025 in GEO, making it the highest rate in the past 115 years,” the report states.

The rise in tariffs is projected to result in an increase in consumer prices and a decrease in corporate profits in the US, the announcement adds. The price increases will lead to a decline in real wages, negatively impacting consumer spending, while lower profits and policy uncertainty will deter business investments, say Fitch analysts.

US President Donald Trump signed an executive order yesterday imposing “reciprocal” tariffs on imported goods from other countries, declaring April 2 as “Liberation Day.” The baseline minimum tariff rate will be set at 10%. However, most countries will face higher rates, which, as explained by the US Trade Representative’s office, have been calculated considering the trade deficit figures between the US and each specific country, aiming to create equilibrium instead of a deficit.