.....so I was reading this: https://blogs.worldbank.org/trade/picture-trade-types-tariffs-explained

"Bound Tariffs are specific commitments made by individual WTO member governments. The bound tariff is the maximum MFN tariff level for a given commodity line. "

Lovely stuff.

A Most Favored Nation (MFN) Tariff is one that WTO member countries promise to impose all of their trading partners who are also WTO members, unless the country is part of a preferential trade agreement (such as a free trade area or customs union). This means that, in practice, MFN rates are the highest (most restrictive) tariffs that WTO members charge one another.


From this I understand that the bound tariff is the max tariff a WTO nation will charge another WTO nation member on imports.

This diagram suggests so:

enter image description here

Then I look here at the US data

enter image description here

So what's going on?

Is this just a case of the US saying they're upper bound is X but they actually break the agreement and charge Y? That's what I assumed. However I would then expect this to show up in the effectively applied tariffs.

But that doesn't seem to hold either:

enter image description here

If US is breaking its stated bounds and applying a higher MFN then the effectively charged rates should be higher.

Can anyone explain this for me?

Moreover, looking at the data I can find little evidence implying increased tariffs since 2016 by the US. The effectively applied rates look pretty flat to me, although the MFN did jump in 2016 so I suppose something is going on there.

enter image description here

So if there's some WTO experts out there I'd be most interested to hear from you.

Many thanks in advance.



Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.