Which Countries Have the Highest Tariffs?

Tariffs have historically been implemented by nations as a way to protect their home products from being underpriced by foreign competition. In modern times, they have largely been abolished as nations sign mutual trade agreements to take advantage of opportunities for their products abroad.

Tariffs still exist, though, most often in less developed countries that are struggling to grow their domestic industries or are seeking a steady source of revenue. The downside is high prices for domestic goods and even higher prices for imports once the tariffs are factored into the price.

Tariff analysis is complicated, as different rates apply to various products from various partners. Moreover, the listed or "bound" rates often do not match applied rates. The tariff rankings listed below are based on the World Bank's "weighted mean applied tariff" figures, which account for the volume of imports from different partners, as of 2020 (the latest data available).

The 10 countries with the highest import tariffs as of 2020 are listed below. It is important to note, however, that reliable information is missing for dozens of countries and the last reported figures for some are earlier than 2020.

Highest Tariffs

Source: World Bank, 2020 data

As the examples above indicate, less-developed countries tend to have the highest trade barriers. Developed countries are generally less restrictive. For example, 28 countries in the European Economic Area (EEA) have an applied tariff rate of 1.5%. This may not remain the case, however, as political opposition to pro-trade policies spreads in the developed world.

Bermuda

Bermuda's weighted mean tariff had been fairly consistent at below 20% from 2007 to 2017, where it shot up to 103% in 2019, then dropped to its current level of 24%. Bermuda uses the Harmonized Commodity Description and Coding System (2012) for its tariffs. The average rate for goods is 22% but is reduced to 5% to 15% for food imports. Vehicles, depending on the price, have tariffs of 75% to 150%.

Belize

The Belize Customs and Excise Department accounts for 50% of the country's annual government revenue. The tariff schedule is derived from the Caribbean Community’s (CARICOM) Common External Tariff (CET). Tariffs range from 0% to 45%, depending on the good. The goods with no tariffs include food and medicine while the 45% level tariffs are applied to automobiles, boats, and live animals.

Lowest Tariffs

Below are the 10 countries with the lowest tariffs.

Source: World Bank, 2020 data

Tariffs vs. Free Trade

When Adam Smith published The Wealth of Nations in 1776, international trade was largely defined by extremely restrictive import tariffs and quotas. His influence contributed to a consensus among economists that lowering trade barriers encourages economic growth.

That consensus was particularly strong among Western economists in the second half of the 20th century, leading to a general decline in tariffs around the world.

Many tariffs still exist, however, even among the most free-market countries. Japan, for example, favors its rice farmers through high import duties, and the U.S. does the same for its peanut farmers.

Nor are tariffs the only variety of trade barriers: others include exchange controls, subsidies, fair trade laws, local-content requirements, and quotas on imports and exports. Based on this broader view of trade barriers, the Fraser Institute compiled a ranking of countries based on openness to trade in 2019 (latest figures), as depicted below.

The Bottom Line

Many nations have abolished tariffs and signed free trade agreements to pursue foreign markets for their goods.

There are exceptions, however. The United States has protective tariffs in place for certain industries including paper clips, tuna fish, tobacco, and peanuts.

Other countries, most of them smaller and less developed, continue to impose tariffs as a way to encourage local production and raise government revenue.