BW #95: Tariffs

One of the centerpieces of Donald Trump's election campaign was his plan to increase tariffs (i.e., import taxes) on a wide variety of goods entering the United States. He said that he would raise tariffs not just on Chinese goods, but also on many things imported from Europe, Canada, and Mexico. And these wouldn't be targeted tariffs, either; they would cover nearly everything.

Needless to say, these tariffs would raise prices on many American goods, either because of tariffs on the goods themselves, or on the raw materials needed to make them. Which might explain why, on the day after the election, Google reported a huge rise in the number of people asking, "What are tariffs?" There has been no shortage of discussion of the tariffs, including on Marketplace (https://www.marketplace.org/2024/12/02/this-customs-broker-is-prepping-for-another-round-of-trump-tariffs/) and The Daily (https://www.nytimes.com/2024/12/02/podcasts/the-daily/its-tariff-time-again.html).

I was teaching a class at Israel's central bank a few days ago, and the subject of tariffs came up during one of our breaks. (That's what passes for small talk when you're hanging out with economists!) One of my students said that while Trump's suggested policies would indeed be inflationary, the United States does tend to have lower tariffs than many other countries.

You could argue that low tariffs are a good policy, saying that they allow Americans to create, manufacture, and consume at a lower price point than other countries. But my student's point was that there's room for some tariffs to go up to some degree, in order to protect some industries. The key is to balance the harm (i.e., higher prices) against the benefit (i.e., healthier domestic production).

This got me thinking: How high (or low) are US tariffs compared with the rest of the world?

I decided to look for data about tariffs for this issue of Bamboo Weekly, and quickly confirmed my suspicions that this is a hugely complex subject. The World Trade Organization has a portal for tariff data (http://tariffdata.wto.org/default.aspx); I tried to download seemingly small subsets on a number of occasions, and managed to hang their system, presumably because the data set is so large and complex.

I found some slightly older data from the World Bank, at https://data.worldbank.org/indicator/TM.TAX.MRCH.WM.FN.ZS?view=map . That page allows you to select countries that will displayed in a graph or on a map, or to download the data in either CSV or Excel format. This data wasn't quite as rich as the WTO's portal, but it is available (a nice advantage when trying to analyze data) and simple enough for us to work with.

Data and six questions

I have six tasks and questions for you this week. As mentioned, we'll look at the World Bank's tariff data. After going to https://data.worldbank.org/indicator/TM.TAX.MRCH.WM.FN.ZS?view=map, choose the "excel" link from the "download" area on the right of the page, which should lead to https://api.worldbank.org/v2/en/indicator/TM.TAX.MRCH.WM.FN.ZS?downloadformat=excel .

Learning goals this week include working with Excel files, filtering rows and columns, plotting, and joining.

I'll be back tomorrow with my solutions and explanations, as well as the Jupyter notebook I used to solve these problems.

• Load the first sheet ("Data") into a Pandas data frame. Use the three-letter country code as the index, and remove the Indicator Name and Indicator Code columns.
• Load the second sheet (Metadata - Countries) into a second data frame. Again, use the three-letter country code as the index.