Data on import tariffs are compiled by the World Bank and the World Trade Organization (WTO). Tariff analysis can be complicated, as different rates apply to different products from different 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 2019.

Key Takeaways

  • Tariffs are taxes on imports imposed by a government as a protectionist strategy.
  • Economists often discourage tariffs in favor of free trade since tariffs lead to price inefficiencies and costs to consumers.
  • Less developed countries, such as those in the Caribbean and Africa tend to have the highest levels of tariffs.
  • Developed countries tend to have lower tariffs, although this is not always the case.

The 10 countries with the highest import tariffs are listed below. It is important to note, however, that reliable information is missing for dozens of countries.

Highest Tariffs

Country Weighted Mean Applied Tariff
Palau 118.2%
Bermuda 103.2%
Fiji 24%
St. Kitts and Nevis 21.1%
Seychelles 20.3%
Maldives 18.4%
Bosnia and Herzegovina 17.9%
Solomon Islands 17.5%
St. Lucia 16.7%
Nauru 15.6%

Source: World Bank, 2019 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 1.8%. This may not remain the case, however, as political opposition to pro-trade policies spreads in the developed world.

Below are the 10 countries with the lowest tariffs.

Lowest Tariffs

Country Weighted Mean Applied Tariff
Hong Kong (China) 0.0%
Macao (China) 0.0%
Brunei Darussalam 0.0%
Singapore 0.4%
Chile 0.4%
Peru 0.7%
Lao PDR 0.8%
Australia 0.8%
New Zealand 0.9%
Botswana 1.0%

Source: World Bank, 2019 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 has contributed to a consensus among economists that lowering barriers to trade 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 2018, as depicted below.

The Bottom Line

Countries implement tariffs to protect their industries from foreign competition. This tactic is commonly seen in less developed countries that are still growing their industries. Tariffs can hurt international trade, however, and increase the prices of goods for domestic consumers. Many countries and regions have established free trade agreements to abolish or reduce tariffs, which have helped facilitate trade, globally.