PPI’s Reinventing America’s Schools (RAS) Project has a new podcast series on titled “The Future is Woman” recorded live at the 2023 Essence Festival in New Orleans, Louisiana.
In the fifth and final episode of this five-part series, RAS co-director Curtis Valentine sits down with Dr. Kaya Henderson, Chief Executive Officer of Reconstruction.
Learn more about the Reinventing America’s Schools Project here.
Learn more about the Progressive Policy Institute here.
By Paul Bledsoe
The last few weeks have brought unprecedented high temperatures in the U.S. and globally, including the four hottest days in a row worldwide ever in recorded history. More than 100 million Americans in 15 states were under extreme heat last week, with similar conditions expected for this week for most of the country, causing increased rates of asthma, heat stroke and a spike in emergency room visits. Already, new research finds more than 60,000 people died in Europe last summer due to extreme heat.
Scientists have been warning us of these climate impacts for decades — and that if left unchecked, emissions will cause feedback loops and tipping points in natural systems that will greatly accelerate global warming and its deadly impacts.
We are, in fact, far closer to disastrous, runaway climate change than our leaders are willing to admit. Collectively, we are sleepwalking toward catastrophe, willfully ignoring the signs of impending calamity much as monarchs and heads of state did in Europe in 1914 and 1939 on the precipice of the 20th century’s world wars.
This story was originally published by The Messenger on July 25, 2023.
The New York City suburb of Scarsdale, located in Westchester County, New York, is one of the country’s wealthiest communities, and its residents are reliably liberal. In 2020, three-quarters of Scarsdale voters cast ballots for Joe Biden over Donald Trump. One can safely presume that few Scarsdale residents are ardent backers of Trump’s wall on the Mexican border. But many of them support a less visible kind of wall, erected by zoning regulations that ban multifamily housing and keep non-wealthy people, many of them people of color, out of their community.
Across the country, a lot of good white liberals, people who purchase copies of White Fragility and decry the U.S. Supreme Court for ending affirmative action, sleep every night in exclusive suburbs that socially engineer economic (and thereby racial) segregation by government edict. The huge inequalities between upscale municipalities and their poorer neighbors didn’t just happen; they are in large measure the product of laws that are hard to square with the inclusive In This House, We Believe signs on lawns in many highly educated, deep-blue suburbs.
PPI’s Reinventing America’s Schools (RAS) Project has a new podcast series on titled “The Future is Woman” recorded live at the 2023 Essence Festival in New Orleans, Louisiana.
Over the past two years, Congress has passed several much-needed laws and allocated over a trillion dollars to grow and update infrastructure and clean energy technology in the United States to combat climate change and lower consumer energy costs. However, these projects cannot become a reality under the current regulatory structure, which takes several years just to approve single projects.
Policymakers on both sides of the aisle have an interest in addressing this issue, and Congress recently enacted a first-pass set of permitting reforms as part of an agreement to raise the debt ceiling. While the Progressive Policy Institute (PPI) supported this legislation, it doesn’t go far enough — and Senate Majority Leader Chuck Schumer and House Majority Leader Kevin McCarthy agree. Additional reform is needed to create ambitious changes required to fully modernize the outdated American regulatory process and unleash clean energy deployment that can outcompete the rest of the world.
Today, PPI released a new report titled “Building the World’s Most Advanced Energy Economy: A More Ambitious Approach to American Energy Permitting Reform.” Report authors Elan Sykes, Energy Policy Analyst, and Paul Bledsoe, Strategic Advisor, propose a fundamental change to the permitting process by utilizing new analytics, scoping, and mapping technologies that can provide federal agencies and regulators the tools they need to comprehensively approve large batches of projects together, instead of individually reviewing projects.
“The scale and pace of deployment needed for the clean energy transition must be met with an equally ambitious update to America’s environmental regulations. After half a century operating under restrictions designed without climate change in mind, growing ever more burdensome, we believe that Congress must aim higher than modest change around the edges,” said Elan Sykes, Energy Policy Analyst at PPI. “We must use modern technology to revamp our entire approach and ask federal agencies to review problems rather than projects, giving transparency to developers and communities alike and bringing countless economic and environmental benefits to households across the country.”
“Recent modest permitting reforms included in the June budget deal were important, but they will not bring about the transformative policy changes needed to quickly permit and build the thousands of energy projects currently pending approval,” said Paul Bledsoe, Strategic Advisor at PPI. “The reforms proposed in the report have the opportunity to rapidly unleash new projects, helping to drive economic growth and reduce energy costs which are key components of inflation. We look forward to working with both parties in Congress on this crucial economic and environmental opportunity.”
The report builds on existing policy recommendations, but goes further by emphasizing moving away from single-project reviews and individual permits to a more systematic approach of programmatic reviews and general permits. Providing clear and transparent rules for by-right approval is the only way to meet the scale of clean energy deployment at the pace the United States needs to compete globally and lower emissions.
Read and download the report here.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels, Berlin and the United Kingdom. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org
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Media Contact: Amelia Fox, afox@ppionline.org
America needs to build bigger and cleaner. Facing economic and regulatory headwinds that affect our ability to grow the economy, channel investment into clean energy, and scale up the technologies needed to prevent climate change, we can no longer accept the burden of a regulatory framework designed for different problems and offering then-current solutions half a century ago that now penalizes and delays cleaner projects in the name of environmental protection. Reforming this system of environmental reviews under the National Environmental Policy Act (NEPA) and the many types of permits issued by federal agencies that require a prerequisite NEPA review is a necessary shift in economic and climate policy that remains unfinished.
In 2021 and 2022, Congress passed a trio of much-needed laws designed to grow and update U.S. infrastructure, clean energy technology, and research and development. Allocating over a trillion dollars in funding across a wide range of policy tools, the bills included tax credits, grants, and loans; a wide range of technologies, including not just technology-specific boosts like the hydrogen tax credits or grants for port modernization but also technology-neutral incentives for clean energy generation; and a wide distribution of benefits, both in geographic and socioeconomic terms.
Yet this funding cannot manifest as meaningful real-world construction under the current policy structure: According to data from the Federal Permitting Improvement Steering Council, the average time from formal start to final decision for projects under NEPA review averaged 4.3 years for transmission lines, 3.5 for natural gas pipelines, and 2.7 years for renewable energy generation projects. In order to maximize the public return on investment and build public confidence in this program, projects will need to move out of the theoretical realm and into the ground to start providing people with tangible results in the form of cheaper, cleaner power, bigger and better factories producing clean new cars and appliances, and also new facilities to produce the materials and components needed for all of this new technology.
Policymakers on both sides of the aisle have an interest in fixing this issue. A deal between Senator Joe Manchin and Majority Leader Senator Chuck Schumer in the fall of 2022 secured support from nearly all Senate Democrats for permitting reform modeled on existing programs for transportation and other infrastructure. PPI endorsed that effort and issued a major report with further policy recommendations at the time, but the measure fell short for lack of Republican support. This spring, in addition to several new Democratic proposals from President Biden, Senator Tom Carper, and Representatives Sean Casten and Mike Levin, Republicans introduced several iterations of their own reforms. As part of an agreement to raise the debt ceiling reached between President Biden and the Republican-majority House in May, Congress passed a series of fiscal measures and included parts of Rep. Garret Graves’ BUILDER Act as a first-pass set of permitting reforms. Specifically, these include:
• Streamlined interagency review process with a lead agency and coordinated timetables;
• 1-2 year “Shot clocks” to encourage faster environmental reviews;
• Sharing Categorical Exclusions across federal agencies;
• Minor changes to NEPA (National Environmental Policy Act) changes: Programmatic NEPA reviews are authorized for use in subsequent documents for five years without further study, Page limits are imposed for NEPA documents (not including citations or appendices), clear standards for levels of review for different actions, narrow changes for the consideration of project alternatives and impacts, including considering the environmental benefits of a project, and authorizing a study on E-NEPA (improvements to the law’s administrative technology suite);
• Other changes: giving energy storage projects eligibility for the FAST-414 permit streamlining process, approving the Mountain Valley Pipeline, and authorizing a study on interregional transfer capacity for U.S. electric grids.
These reforms, which line up with PPI’s September 2022 recommendations, were negotiated under the severe pressure of default, and will unlock small but meaningful gains in permitting timelines and costs. They did not, however, include appropriately the ambitious changes required to fully modernize the sorely outdated American regulatory process and unleash clean energy deployment that can outcompete the rest of the world.
The imperative to deploy clean energy as quickly and cheaply as possible has not changed, but with Congress split and only part of the task complete, the political calculus has. Policymakers on both sides of the aisle have proposed crucial pieces of an even more ambitious reform package, and both need the other’s support to accomplish their own self-defined goals. While many progressive Democrats opposed reform last September, even their stance may be shifting as stalwart environmentalists like Bill McKibben, previously a dedicated activist focused on stringent supply-side fossil fuel restrictions, have come out in favor of shaking up the permitting system at least for the cleanest and most urgent projects for climate progress. The Republican-led House and Democratic-majority Senate will need to avoid polarizing themselves out of a deal that would bring substantial, meaningful wins to both their base constituencies on their own terms. Both sides must realize that a permitting and transmission deal will provide huge benefits to all major constituencies and stakeholders such that policy compromises will be rewarded politically rather than punished.
Agreement is not yet assured, but it is possible if a deal contains both broader reforms of permitting under NEPA than the debt ceiling deal, along with better coordination of compliance with other relevant environmental laws and appropriately scaled changes to the process of planning, siting, and paying for crucial electricity transmission. Both elements — NEPA reforms and transmission expansions — will be necessary for legislation to bring about a true renaissance in the U.S. energy economy that will provide unprecedented economic benefits to consumers, workers, and businesses while boosting U.S. competitiveness and reducing emissions.
By Elan Sykes
When President Biden agreed to a debt limit deal with House Republicans in June, he greenlit many of their changes to the federal approval process for energy projects, typically referred to as permitting reform. Both parties came away with a win. Job well done, right?
Not quite, especially when it comes to the growth of clean energy in this country. Permitting reform isn’t just a Republican priority. Democrats passed significant new financing for the energy transition earlier in Biden’s presidency, but without further permitting reform that addresses their key issues, it won’t achieve nearly enough. And Republicans who may have taken a victory lap on the debt-limit deal have permitting goals to accomplish, too. A better deal could still be had.
2022 26
2012 36
2002 54
1992 55
*World Bank definition and estimate, based on per capita gross national income.
Since the mid-1980s, the World Bank has been informally grouping economies into four tiers of wealth. They begin at “low-income” and ascend through “lower-middle income” and “upper-middle-income” to “high income”, divided by annually adjusted levels of Gross National Income per capita. The list comes out each year, with the thresholds slightly adjusted to take account of inflation and a few arcane macro-issues. It is meant less to measure inequality among countries (though it does offer some comparisons) than to give a stable definition of what it means for an economy to be poor, rich, or somewhere in the middle. Over time, it also allows you to see change — this year, with a vivid four-color visualization — as some countries rise, others descend, and the world as a whole changes. First the numbers, then the colors and the trend they show:
Numbers: In the 2023 list, a “low-income” economy has a GNI per capita of $1,135 or less per year. The Bank finds 26 such countries, from Burundi (the poorest country in the world at $240 per person per year, with Afghanistan and Somalia a bit above) to Ethiopia at $1,020. A “high-income” economy’s GNI per capita, meanwhile, is anything above $13,845. This group’s brackets are two small-island tourist favorites: Seychelles in the Indian Ocean at $14,340 and Bermuda at $125,240. (The U.S. is seventh at $76,370; more below.) In between are (a) lower-middle-income countries from $1,136 to $4,445 per person per year, in practical terms from Tanzania, Tajikistan, Nepal, and Myanmar just above the low-income line to Mongolia, Jordan, and Ukraine at $4,200+; and (b) upper-middle-income countries from Indonesia and the West Bank and Gaza a bit above $4,500 to China, Bulgaria, and pre-invasion Russia, each a few hundred dollars below “high-income” status.
The list changes a bit each year, sometimes to add some new economies but mostly to report shifts in classification. The 2023 list, for example, the Palestinian territories and El Salvador in upper-middle income territory for the first time, and restores Indonesia (which first entered this group in 2019, but temporarily fell back out during the Covid pandemic). Guinea and Zambia likewise cross from low-income to lower-middle income, and Guyana and American Samoa from upper-middle to high-income. More systemic changes show up over decades rather than years: taken in 10-year jumps, the last 30 years reveal a steady upward drift across the entire list:
1992: This early edition of the list, contemporary with the birth of the World Wide Web, the creation of the WTO, etc. included 204 economies. Of this total, 55 were low-income, 71 lower-middle income, 39 upper-middle income, and 39 high income. Using a simpler breakdown, the list was weighted toward the bottom, with 126 low- and lower-middle income states and 78 upper-middle and high-income economies. Thus about 62% of economies fell below the line separating the low and lower-middle income tier from the upper-middle and high-income region, while 38% placed above it.
2002: 209 economies, of which 64 were low-income, 54 lower-middle, 34 upper-middle, and 57 high income.
2012: 215 economies (larger in part because of a couple of declarations of independence, but mainly due to more complete coverage of small islands), of which 36 were low-income, 48 lower-middle, 55 upper-middle, and 76 high income.
2022: This most recent edition, out in early July, covers 217 economies, of which only 26 are low-income, 54 lower-middle, an identical 54 upper-middle, and 83 are high income. So 137 of them, or about 63%, are now above the “median” line and 37% below, reversing the 1992 proportions.
Colors: Accompanying this year’s release, a time-series map colors high-income countries dark forest green, upper-middles a lighter emerald shade, lower-middles a kind of lilac purple, and low-incomes dark purple or violet. The 1992 map has no green anywhere between Germany and South Korea; all the most populous countries in the heart of Asia — Pakistan, India, Bangladesh, Indonesia, Vietnam, and China — combine in a forbidding block of low-income violet, relieved only by lilac Thailand, emerald Malaysia, and tiny dark green dots for Brunei, Singapore, and Hong Kong. Africa meanwhile has some light green at the top and bottom, but apart from a bit more light green for oil-exporting Gabon and light purples for Namibia and Angola, it’s gloomy violet all the way from the Sahara to the Kalahari. In the Western Hemisphere, a light purple shading extends through nearly all of Latin America; and Western Europe’s, dark green ends at the eastern borders of Germany, Austria, and Italy, with a bit of light green for Hungary and everything else lower-middle income lilac.
As the time-lapse proceeds, Asia’s violet block fades to lilac for China and Southeast Asia by the 2000s, and then (with exceptions for Afghanistan and North Korea) goes green in the north and lilac in South Asia. Africa’s violet retreats from the continent’s maritime rim, and now concentrated in inland states and the Horn, is almost completely ringed by lilac. The light purples in Latin America mostly vanish (though Venezuela falls off the green map, and the Bank isn’t venturing a guess this year), and dark green high-income tones turn up in Panama, Chile, Uruguay, and five Caribbean island states. And the forest-green edge of western Europe flows east and south as EU and NATO membership grows, sequentially incorporating Poland, the Baltic states, the Czech Republic and Hungary, Croatia, and most recently Romania.
In practical human-being terms, as this has proceeded the number of people living in deep poverty has dropped from 1.995 billion of 5.3 billion people then – that is, 38% or nearly two-fifths of humanity — to 655 million of 8 billion, or about 8%, as of the last estimate covering the year 2018. Sometimes, things do get better.
* Technically by “Gross National Income Per Capita, Atlas Method.”
The WB’s visualization, with links to this year’s country income groups and explanations of the various calculations they involve.
The U.S. and the top end The U.S.’ 2022 ranking is seventh among the 216 economies by per capita income, just above Denmark and Qatar at $76,370 per person. The top six are Bermuda at $125,240, Norway at $95,610, Luxembourg at $91,200, Switzerland at $89,450, Ireland at $81,070, and the Isle of Man at $79,300. An alternative calculation, by purchasing-power parities, lifts Norway into first, followed by Qatar and Singapore, then Bermuda, Luxembourg, Ireland, the United Arab Emirates, and Switzerland with the U.S. ranked ninth.
The big economies — Among the world’s 16 largest economies (as measured by total GDP), the list reports nine in the high-income group, six at “upper-middle-income,” and one “lower-middle-income” economy, and no low-income economies. A list with these 16 and their “rankings,” along with Bermuda and Burundi in italics as the top and bottom bounds:
[High-income]
1. Bermuda, $125,240
7. United States, $76,370
15. Australia, $60,430
21. Germany, $53,390
22. Canada, $52,960
24. United Kingdom, $48,890
28. France, $45,860
30. Japan, $39,570
34. Korea, $35,990
35. Spain, $31,860
[Upper-middle-income line = $13,845]
70. China, $12,830
71. Russia, $12,810
80. Mexico, $10,410
88. Brazil, $7,920
121. Indonesia, $4,580
[Lower-middle income line = $4,445]
147. India, $2,380
[Low-income line = $1,145]
217. Burundi, $240
A PDF of the full list from the World Bank.
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
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PPI’s Reinventing America’s Schools (RAS) Project has a new podcast series on titled “The Future is Woman” recorded live at the 2023 Essence Festival in New Orleans, Louisiana.
In the third episode of this five-part series, RAS co-director Curtis Valentine sits down with Tracey Dumas Clark, Chief Program Officer at 4.0 and Crystal Gilliam, Director of Philanthropic Programming at 4.0.
Learn more about the Reinventing America’s Schools Project here.
Learn more about the Progressive Policy Institute here.
You can’t easily reduce America’s flagging faith in government to any single factor. But if there’s any one thing that surely contributes to the electorate’s frustration with Washington, it’s the seemingly endless litany of examples demonstrating how government gets in its own way.
That’s about to happen, once again, with the forthcoming reauthorization of the Federal Aviation Administration’s oversight of the nation’s airline industry. Unless those interested in the greater good prevail, a handful of self-serving companies may undermine the public interest. And if that happens, those who regularly trumpet the notion that government is always the problem — those who, as President Trump likes to argue, believe the public is constantly getting a “bad deal” — will have yet another sorry episode to burnish their indictment.
By Tamar Jacoby
Pavlo Novyk monitors his native Kharkiv, a city of 1.4 million near the Russian border, from an apartment 500 miles away in much safer western Ukraine. Part journalist, data geek, and civil society activist—he works for the nonprofit Kharkiv Anticorruption Centre—Novyk spends his days online, scrutinizing Kharkiv government purchases. Once one of the most corrupt cities in Ukraine, Kharkiv is now legally required to make purchases—everything from printer paper to hospital beds to food for animals in the city zoo—through an online portal available to the public.
Westerners watching the fighting in Ukraine are waiting for a breakthrough on the battlefield. But Ukraine’s struggle to free itself from centuries of Russian rule and toxic Soviet-era influences is more than a military face-off. It is also a war on corruption. This second fight is being waged in the capital, Kyiv, where the president and parliament have created a network of anticorruption courts and law enforcement agencies, but also in cities like Kharkiv, where corrupt mayors aligned with Russia have historically stolen public funds with impunity.
The good news from Kharkiv, Ukraine’s second-largest city, once a bustling industrial hub and gateway for trade with Russia: anticorruption activists like Novyk say their 10-year battle against bribery, extortion, and other forms of corruption is beginning to pay off. A combination of new online tools and pressure from international donors has given activists an edge, and city officials have started to respond when civil society groups file complaints.
The U.S. economy presents a frustratingly mixed picture. Viewed from some angles — low unemployment, rising wages and bullish financial markets — it conveys strength. From others – high prices, interest rates and debt — it looks heavily burdened and susceptible to recession.
While economists debate whether the glass is half empty or full, the public’s verdict is clear. Americans are strikingly pessimistic about the nation’s economy, with only 30 percent describing it as good.
The White House thinks it’s found just the thing to lift the country’s glum spirits — a new economic doctrine. In recent weeks, President Biden and his advisors have been touting “Bidenomics” as a bold new departure from the “trickle-down” theories that supposedly held sway over the past 40 years.
This grandiose claim hardly seems fair to the Democrats who occupied the White House for 16 of those years. Did the Obama-Biden administration really embrace the tax-cutting, trickle-down policies of Ronald Reagan and subsequent Republican presidents?
Erin Delaney, Director of Health Care Policy at the Progressive Policy Institute (PPI), released the following statement on the Food and Drug Administration’s (FDA) decision to approve an over-the-counter (OTC) birth control pill:
“PPI applauds the FDA for its approval of Opill, the first daily OTC birth control pill, after decades of advocacy to make birth control more accessible. Allowing the sale of OTC birth control pills means that the more than 19 million women of reproductive age living in contraceptive deserts could have access to the health care they need. This is a historic victory for public health and health equity as we continue to fight for reproductive access and freedom, especially in the wake of Roe.
“Now that this step has been taken, it is critical to ensure that OTC birth control pills are affordable, covered by insurance, and are available in all pharmacies — including independent pharmacies — to ensure rural access. While OTC medications are typically less expensive than prescription, the cost of Opill is not yet known and health plans are only encouraged, not required, to cover OTC birth control pills without cost-sharing. Currently, most private health insurers cover prescription birth control pills thanks to the Affordable Care Act, and all five major insurers cover different forms of OTC birth control.
“To ensure equitable access to Opill and future OTC birth control pills, PPI endorses the Affordability is Access Act, sponsored by Senator Patty Murray (D-Wash.), that would require all private health insurance plans to fully cover OTC birth control without any out-of-pocket costs to the patient.
“PPI will continue to support efforts to broaden access to comprehensive reproductive health care for all Americans.”
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
Follow the Progressive Policy Institute.
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Media Contact: Amelia Fox – afox@ppionline.org
PPI’s Reinventing America’s Schools (RAS) Project has a new podcast series on titled “The Future is Woman” recorded live at the 2023 Essence Festival in New Orleans, Louisiana.
In the second episode of this five-part series, RAS co-director Curtis Valentine sits down with Steph Walters, Director of Engagement and Communications at Yellow.
Learn more about the Reinventing America’s Schools Project here.
Learn more about the Progressive Policy Institute here.
Imports from U.K., 2022: $63.8 billion
Imports from Pakistan, 2022: $6.0 billion
Tariffs on Pakistani goods, 2022: $607 million
Tariffs on U.K. goods, 2022: $578 million
National Security Advisor Jake Sullivan in April asserted (mistakenly) that the U.S.’ “trade-weighted average tariff rate is 2.4 percent.” His source for this number is unclear; the actual figure, via the U.S. International Trade Commission (see below for detail on authoritative estimates) for 2021 was 3.0%, and pending their official word the 2022 rate looks like 2.8%.
A single number like this, though, is useful but blurry. The blurriness reflects the fact that the actual 11,414 official tariff rates vary greatly. The 5,864 ad valorem tariffs alone start at 0.1% and go as high as 48.0%, the 1,078 specific duties and compound tariffs add complexity, and both are then complicated by thousands of special waivers and surcharges. Therefore as a buyer, the rates you pay depend both on what you’re buying and from whom you got it, and as a country, it’s unusual to get a rate very close to the ‘average.
To oversimplify, the permanent “MFN” tariff system raised about $45 billion last year. It taxes low-priced clothes, shoes, and other consumer goods most heavily, natural resource products and high-tech goods most lightly, and heavy-industry and food in between. Therefore it hits lower-income families hardest. The Trump era’s administratively created “232” tariffs on metals and “301” tariffs on about half of imports from China brought in about the same amount of money (mainly from Chinese goods), but mainly cover industrial inputs such as metals, auto parts, and electronics, and so fall most heavily on industrial-sector buyers like auto plants, construction firms, and repair shops. Meanwhile, the U.S.’ 20 FTAs and three currently operating developing-country “preference” programs waive most tariffs for buyers of things from Canada, Mexico, Australia, South Korea, 16 other FTA partners, and also for countries in sub-Saharan Africa and the Caribbean littoral. Putting all these things together, in practice the 2.8% average becomes a range rising from 0% (for Cuba) to 15.0% (for Bangladesh), with natural-resource exporters and most African countries near the bottom, high-income countries a bit below the world average, diversified middle-income states very close to the average, and low-income Asian countries along with China at the top.
Here’s a look as of 2022, with a few entries from earlier years to illustrate the impacts of the 232 and 301 tariffs:
Three explanatory notes for this pattern:
High tariffs on low-income Asia: The high rates at the top reflect the specialization of many lower-income Asian countries — Bangladesh, Sri Lanka, and Pakistan in particular, Cambodia now a bit less so — in exports of clothing and home textiles. This explains why buyers of Pakistan’s modest $6 billion worth of shirts, towels, and similar goods pay fourteen times more than buyers of Norway’s slightly larger $6.7 billion in salmon, oil, and pharmaceuticals, and in fact more than buyers of $63 billion in British medicines, art auction proceeds, and aircraft parts. Ethiopia also shows up here, having lost its AGOA tariff waiver in January 2022 but still exporting somewhat smaller quantities of clothes.
Low-to-medium rate on others: The lowest rates show up for countries that are (a) natural resource exporters (oil for Kuwait and Saudi Arabia, fish for Fiji and Greenland); and (b) FTA partners and special program beneficiaries, with Canada, Jordan, El Salvador, South Korea, and Colombia representing the first group; and Kenya, South Africa, Ghana, Haiti, and Jamaica the second. Larger upper-middle-income and high-income countries — Germany, Poland, Brazil, Argentina, Thailand, Japan — have diversified export mixes, typically with a lot of zero-tariff products, a lot of mid-tariff products, and some high-tariff goods, and usually wind up in a range from 1% to 3%. India is also now in this range, though still a lower-middle-income country. There was only one actual zero-tariff country in the world — meaning, some imports but no tariff revenue collected at all. This weirdly turns out to be Cuba, where trade remains mostly banned, a few licensed U.S. buyers have been buying Cuban artwork, and tariffs on paintings, sculpture, antiques, etc. are all permanently set at zero.
301 & 232 effects: The U.S. worldwide tariff average — that is, the statistic Sullivan was looking for — doubled from 1.4% in 2017 to 2.8% in 2022. The effect of the Trump administration’s “232” steel and aluminum tariffs was small, affecting only about 1.5% of imports and changing average rates for suppliers like the EU, Japan, and Brazil only modestly. The higher global average mainly results from the “301” tariffs on Chinese goods: following these, though China lost some “import market share,” total imports of Chinese goods remained at $500 billion, tariff revenue rose about four-fold, and the average tariff paid by buyers of Chinese goods accordingly rose from 2.7% to 11.0%. This 11.0% is quite high in comparison to the world average — but, pretty remarkably, is still below the normal rates imposed on buyers of Bangladeshi and Sri Lankan goods.
Sullivan’s April global-economy talk.
… and a worried response from PPI’s Ed Gresser.
At home:
PPI’s take on the tariff system as a form of taxation, and its impact on low-income American families and communities.
Case study 1: PPI’s Valentine’s Day blast against the unfair, gender-biased U.S. underwear tariff system.
Case study 2: And reports on the contrast between high tariff rates on cheap stainless-steel spoons, and low ones on sterling silver.
“Average tariff rate”:
The NSC’s neighbors at the Office of Management and Budget report $99.9 billion in “customs duties and fees” in FY2022. This makes the tariff system the fourth-largest federal tax, about equal to the combined revenue totals from the $32.5 billion inheritance taxes, the $46.6 billion gas tax, and the $10.2 billion alcohol and $11.3 billion tobacco excise taxes. Subtracting the two main fees from this total (CBP’s Merchandise Processing Fee and Harbor Maintenance Fee revenue), the result is an average of about 2.8%. The U.S. International Trade Commission annually reports “duties” without the “fees”, but hasn’t yet released its final 2022 figure. For 2021 it got $84.5 billion in tariffs, $2.824 trillion in imports, and a 3.0% overall rate. Their preliminary figure for 2022 is a bit lower, with $90.1 billion in tariffs on $3.277 billion in imports, or 2.75%.
OMB’s Historical Tables offer comparisons with other taxes.
… CBP explains the “fees.”
A long view – The U.S. International Trade Commission tracks U.S. tariff rates from the McKinley Tariff of 1890 to 2021.
The tariff system itself:
From the first chapter (01 for live animals) to the last, (97, for artwork), the tariff system’s 11,414 different eight-digit “lines” are meant to give every physical thing a number and a tax rate. The first line, “0101.21.00” stands for “purebred breeding horses” and is set at zero. The last, “9706.90.00,” is for antiques between 100 and 249 years old and is also zero. Overall, the 11,414 lines include (a) 4,315 set at zero (say, for natural gas, smartphones, paper, toys, and medicines); 5,864 with above-zero “ad valorem” (i.e., percentage) tariffs ranging from 0.1% to a peak of 48% for cheap sneakers; and 1,078 “specific duties” (flat fees) and “compound” tariffs (percentages plus flat fees), where tariff change each year with prices. For example, pinking shears used by tailors and dry cleaners are set at 8% plus 8 cents for each. Adding to the confusion are thousands of exemptions and surcharges coded via letters or set down in alternative chapters 98 and 99.
From the ITC, a two-page summary of the 11,414 U.S. tariff lines — how many zero? how many duty-free under FTAs and preferences? how many “specific duties” and compounds? — etc.
And the actual U.S. tariff system, by chapter or the full 4,352-page book in PDF.
International comparisons:
The World Bank’s interactive table of average tariff rates worldwide and by country uses the same “weighted” approach. It has a worldwide average of 2.6% as of 2017, and rates by country for the most recent available year. The world’s highest rate is Bermuda’s 24.1%, followed by Belize at 18.7%, Gambia 17.8%, and Djibouti 7.6%. The lowest are the zeroes for Hong Kong and Macao. Use this with care; its 1.5% figure for the U.S., though correct for 2017, is dated “2020” and isn’t right.
The WTO’s World Tariff Profiles 2022 has more detail, with simple averages, trade-weighted averages, “tariff peak” counts, ag vs. non-ag., and more for 151 countries.
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
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