Tariffs and trade policy have been in the news for months, so today we’re looking at how tariffs have changed over time and the role they play in generating revenue.

Our FRED graph above displays two series:

• The effective import tariff rate (dark-blue solid line, left axis) is the average tax rate the government imposes on imported goods.
• Tariff revenue as a percentage of GDP (light-blue dotted line, right axis) is how much the government collects in tariffs compared with the size of the overall economy.

The effective tariff rate has generally been falling since 1960, continuing a longer trend that began around the 1930s. The percentage of tariff revenue has been falling since about 1990.

Both rates jumped noticeably in 2018 during the first trade war, more or less doubling by 2022. Despite this increase, tariffs still make up only a small part of federal revenue: about 0.3% of GDP per year, far too small to close the gap in the federal deficit, which has been close to 7% of GDP annually in recent years.

How this graph was created: Search FRED for and select “Federal government current tax receipts: Taxes on production and imports: Customs duties.” Click “Edit Graph,” use “Customize data” to search for “Current payments to the rest of the world: Imports of goods,” and click “Add.” Input the formula a/b*100 and click “Apply.” Next, click “Add Line,” search for and select “Federal government current tax receipts: Taxes on production and imports: Customs duties,” and click “Add Data Series.” Use “Customize data” to search for “Gross Domestic Product,” and click “Add.” Input the formula a/b*100 and click “Apply.” In the “Format” tab, click “Customize” for Line 2 and change “Y-Axis position” to “Right.”

Suggested by Maximiliano Dvorkin and Melanie LeTourneau.