Dutch importers bore the cost of European import duties

Although the EU and the US trade large volumes of goods with each other, tensions in the trade relationship, for example over subsidies to aircraft manufacturers, led to additional import duties on specific products. The impact of duties was assessed on the basis of the additional tariffs of 25 percentage points imposed by the EU in June 2018 on 182 US products, including whiskey, fruit juices and steel and aluminium products.

Dutch importers had to pay the increased import duties on these products as soon as these tariff measures came into force. In principle they paid 25 percentage points more, while the amount the exporters received remained unchanged. Between July 2018 and December 2019, Dutch companies paid €44.5 million in additional import duties on these products.

Exporters did not lower their prices

If importers in the Netherlands pass on the higher import tariff, imported goods become more expensive for consumers, while domestically or non-US-produced goods become relatively more attractive. The US exporters could have responded by lowering their selling prices, but they did not do so. After the import duties came into force, Dutch imports of these products from the US fell by 34 percent between 2017 and 2019. The EU had announced the duties three months in advance, giving Dutch companies an opportunity to build up inventories at the old price. Given the increase in the value and quantity of imports between March and June 2018 and the subsequent decrease, Dutch importers do indeed appear to have anticipated the higher tariffs to some extent.

Average import tariff of 1.5 percent on imports from the US in 2019

The average import tariff on goods from the US fluctuated between 1.39 and 1.55 percent between 2017 and 2019. While the 25-percentage-point tariff increase on a select group of products was significant, it therefore had no major impact on the average tariff burden. This is because tariff-rated goods accounted for less than half a percent of the total value of imports from the US in 2019. In 2019 companies in the Netherlands paid a total of around €317 million in duties on imports of US products to our country.

Since the establishment of the World Trade Organization in 1995, import tariffs have fallen worldwide. Dutch importers had to pay an average tariff of 1.8 percent on imports from outside the EU in 2019. The largest amount of import duty was paid on products from China. On the €43 billion worth of goods imported from China in 2019, importers in the Netherlands paid over €930 million in import duties. That amounts to an average import tariff of just over 4 percent.