The U.S. Tariff Rate Just Hit 12.1% — the Highest Since the 1940s.

New tariffs on 60 countries kicked in at midnight. Here’s what 80 years of trade policy looks like in one chart.

U.S. Average Statutory Tariff Rate

1943
Wartime
Peak

14.0%

1946
Post-WWII

10.3%

1960
GATT Era

7.2%

1980
Tokyo
Round

3.1%

2000
WTO &
NAFTA

1.6%

2024
Pre-
Tariffs

2.5%

2026
Today

12.1%

Statutory tariff rate = weighted average of applied duty rates. 2026 figure as of July 21. Excludes the brief 2025 IEEPA spike struck down by the Supreme Court.

Source: Yale Budget Lab (July 21, 2026), U.S. International Trade Commission

At 12:01 this morning, the emergency Section 122 tariff — imposed in February after the Supreme Court struck down the IEEPA tariffs — expired by law. In its place, new Section 301 duties of 10% to 12.5% took effect on 60 countries representing 99% of U.S. imports. The regime changed. The overall rate did not fall. You probably saw the headline between your first and second cup of coffee.

But the headline doesn’t tell you the real story. The real story is in the chart above.

Look at that long, slow staircase down. From the 1940s to 2024, the U.S. spent over eight decades — through GATT, the WTO, NAFTA, and dozens of bilateral deals — grinding the average tariff rate from 14.0% all the way down to 2.5%. That was the work of 15 presidents, both parties, and thousands of negotiators.

Now look at the last bar. In roughly 18 months, the rate jumped from 2.5% to 12.1%. We just reversed about 80 years of trade liberalization... in less time than it takes to pay off a used truck.

Now, whether you think this is the right medicine for American manufacturing or not — I’m not here to argue that today. Reasonable people disagree. But the speed of the change is what matters to your money. Supply chains don’t reorganize on an 18-month timeline. Companies can’t move factories that fast. So prices adjust instead.

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Chart of the Day — July 24, 2026 — Part 2

The Yale Budget Lab estimates current tariffs cost the average household about $550 a year under current law, or $1,100 if the announced Section 301 tariffs are fully implemented. Not as a line item on a bill. Just... things cost more at the register. A little here, a little there. About $45 a month you’ll never see an invoice for.

The Takeaway

“It took the U.S. over 80 years to bring tariffs down from 14.0% to 2.5%. In the last 18 months, we pushed them back to 12.1% — the highest rate since the 1940s. That adds about $45 a month to the average household’s costs, whether you see the bill or not.”

If your portfolio was built for a 2.5% tariff world — and most were — it’s worth asking whether it still fits a 12.1% one. Companies with long international supply chains are repricing right now. Domestic producers with short supply chains are benefiting. That’s worth a 15-minute call with your advisor this week. Not to panic. Just to check.

More tomorrow. Stay sharp.

— Ray Calloway

Whether Tariffs Help or Hurt Isn't the Real Question

The U.S. Tariff Rate Just Hit 12.1% — the Highest Since the 1940s.

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