The Tariff Reality Before the Trump Era

When evaluating the current trade war's impact, it's crucial to understand where we started. The tariff landscape before the Trump administration painted a very different picture of international trade dynamics—one that makes today's trade tensions all the more striking by comparison.

The Pre-2018 Baseline: America's Open Door Policy

Before 2018, the United States maintained one of the most open trade policies among major economies. According to Peterson Institute research, the U.S. average tariff rate on imports from the rest of the world stood at just 2.2% in January 2018. This exceptionally low rate reflected decades of trade liberalization efforts and positioned America as a leader in free trade advocacy.

The White House has acknowledged this historical context, stating that "the United States has one of the most open economies in the world, and the lowest average tariff rates in the world." This openness stood in stark contrast to many of our trading partners, creating the foundation for current trade tensions.

What Other Countries Were Charging Before the Trade Wars

China's Actual Tariff Rates

Despite current administration claims that China charged the U.S. tariffs of 67%, World Trade Organization data tells a different story. According to a Cato Institute analysis of WTO data, China's trade-weighted average tariff rate in 2023 was just 3%—not the dramatically higher numbers suggested in recent political rhetoric.

Before the trade war began in 2018, Chinese tariffs on U.S. exports averaged around 8%, according to Peterson Institute analysis. This rate applied equally to all countries under China's most-favored-nation status, demonstrating that the U.S. wasn't being specifically targeted with higher rates.

European Union: A More Complex Picture

The European Union's trade-weighted average tariff rate, according to WTO data, was 2.7% in recent years. However, the Trump administration has pointed to specific examples where disparities existed, such as passenger vehicles, where the U.S. imposed a 2.5% tariff while the EU charged 10%.'

The administration also highlighted the "double-whammy" effect of Value-Added Taxes (VAT), noting that U.S. companies pay approximately $200 billion annually in VAT to foreign governments, while European companies don't face equivalent taxes on exports to the U.S. However, economists note that VAT applies to both imports and domestic production, so it doesn't create a trade advantage.

Other Trading Partners

Before the current trade tensions, tariff disparities existed across various sectors and countries:

• India: While overall average tariffs were around 12%, specific products like passenger vehicles faced tariffs as high as 70%

• Japan: Maintained low average tariffs at 1.9%, similar to the U.S.

• Canada and Mexico: Operated under NAFTA arrangements with preferential rates

• Brazil: Applied an 18% tariff on ethanol compared to the U.S. rate of 2.5%

  
  

The Historical Context of U.S. Tariff Policy

The low tariff environment of the pre-2018 era represented the culmination of decades-long efforts toward trade liberalization. The U.S. had systematically reduced trade barriers through:

• Multilateral agreements under the World Trade Organization

• Bilateral free trade agreements with key partners

• Regional arrangements like NAFTA

• Most-favored-nation status extensions

This approach reflected the prevailing economic consensus that lower trade barriers would benefit consumers through lower prices and greater choice, while encouraging efficient allocation of resources globally.

The China Exception: Rising Tensions Even Before 2018

While overall U.S. tariff rates remained low, concerns about China's trade practices had been building for years. The Peterson Institute notes that by late 2017, the previous administration had already begun increasing some China-specific tariffs, raising the average rate to 3.1% on Chinese imports—still far below today's levels.

These early moves reflected growing bipartisan concern about:

• Intellectual property theft

• Forced technology transfers

• State subsidies to Chinese manufacturers

• Currency manipulation allegations

  
  

Understanding the "Reciprocal" Tariff Calculation

When the Trump administration announced its "reciprocal" tariff policy in 2025, it used a unique calculation method that differed from traditional tariff analysis. Rather than matching actual tariff rates imposed by other countries, the administration calculated rates by dividing each country's trade surplus with the U.S. by the value of that country's exports to America.

This approach aimed to address not just formal tariffs but also what the administration termed the combined effects of "tariff, regulatory, tax and other policies" that contribute to trade imbalances. However, economists note this method conflates trade deficits with trade barriers, which are distinct economic phenomena.

The Transformation: From 2.2% to Today's Rates

The contrast between the pre-2018 era and today is stark. The U.S. went from having average tariff rates of 2.2% to current effective rates of approximately 17.8% as of May 2025. This represents not just a policy shift but a fundamental change in America's approach to international trade.

This transformation affects not only trade relationships but also domestic prices, supply chains, and economic competitiveness. Understanding this historical context is essential for evaluating both the costs and potential benefits of current trade policies.

The Bottom Line

The pre-Trump tariff environment reflected a dramatically different approach to international trade—one characterized by relatively low, reciprocal rates among major economies and a general movement toward trade liberalization. While disparities existed in specific sectors and with certain partners, the overall framework emphasized openness and multilateral cooperation.

Today's trade tensions and tariff rates represent a significant departure from this historical norm, marking what may be the most substantial shift in U.S. trade policy since the 1930s. As we navigate this new landscape, understanding where we came from helps provide crucial context for evaluating where we might be heading.

Sources and Disclosures

This analysis draws from multiple authoritative sources to provide historical context on pre-2025 U.S. tariff policies:

Primary Sources:

• Peterson Institute for International Economics (PIIE) trade war analysis and historical data

• World Trade Organization (WTO) tariff statistics and country profiles

• Cato Institute report on trade-weighted average tariff rates

• White House fact sheets on trade policy

• Tax Foundation research on historical tariff rates

• FactCheck.org analysis of tariff calculations

Key Historical Data Points Verified Through:

• WTO trade statistics database

• U.S. Trade Representative historical archives

• Academic research from Duke University and other institutions

• Congressional testimony and official government records

Important Disclosures:

• This content is for informational and educational purposes only and should not be considered as political, economic, or investment advice

• Tariff rates and trade policies are subject to frequent changes; data reflects the most recent available information at time of publication

• Economic analysis and interpretations may vary among different institutions and experts

• Trade statistics can be calculated using different methodologies, which may result in varying figures

• The author is not responsible for any decisions made based on this historical analysis

• Readers should consult current government sources and qualified professionals for the most up-to-date policy information

This analysis aims to provide historical context for current trade policies. All rates and figures are based on official government sources and recognized trade organizations' data.