Despite the common refrain of low U.S. tariffs, American companies pay billions of dollars annually in taxes on imports from TPP countries. And while U.S. imports from the world have declined in 2016, tariffs paid on imports from TPP partner countries continued to grow – making swift TPP passage more important than every for U.S. companies with global supply chains.
In the first half of 2016 alone, U.S. imports from the new TPP countries faced nearly $2.7 billion in tariffs. That was about $68 million, or 2.6 percent, more than the same period in 2015. Put differently, American companies importing from these countries have 68 million new reasons to support TPP.
The table below shows the tariffs collected from each of the TPP countries not currently covered by a free trade agreement with the United States.
It’s a mixed bag for the countries in terms of whether tariffs paid increased or decreased. Higher tariffs paid on imports from Vietnam and New Zealand were partially offset by lower tariffs paid on imports from Japan, Malaysia, and Brunei.
There is considerable variation within the countries as well. For example, the biggest increase in tariffs paid on imports from Vietnam came on a certain type of shoes. However, the biggest decrease came on a different type of footwear. Similar examples exist in Japan and Malaysia, where the imports facing the biggest tariff increases and decreases are variations of similar products (autos and apparel, respectively).
While the details can be messy, the big picture is crystal clear: even short delays in passing TPP will lead to big tax bills for American companies.