Dutch importers bore the cost of European import duties

© CBS / Nikki van Toorn
Over the past few years, the United States and the European Union have imposed import tariffs on parts of each other’s exports in several rounds, most recently last month. The additional EU import tariffs on various US products in 2018 were borne fully by Dutch importers. The US exporters did not lower their selling prices and imports of these goods fell sharply. This is reported by Statistics Netherlands (CBS) on the basis of new research in the Internationalisation Monitor on trade policy.

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.

Import duties paid 1)
kwartaalImport duties (million euros) (million euros)
Q1 20140.8
Q2 20141.0
Q3 20141.2
Q4 20141.5
Q1 20151.3
Q2 20151.1
Q3 20151.4
Q4 20151.5
Q1 20161.1
Q2 20162.
Q3 20161.5
Q4 20161.8
Q1 20172.0
Q2 20172.4
Q3 20171.7
Q4 20170.9
Q1 20180.7
Q2 20180.7
Q3 20182.2
Q4 20186.9
Q1 20195.4
Q2 201914.8
Q3 20195.8
Q4 20194.8
Q1 20204.7
1) The raised tariffs came into force in Q3 2018.

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.

Import value of tariffed US-produced goods1)
KwartaalImport value (million euros)
Q1 201828.8
Q2 201830.9
Q3 201836.7
Q4 201824.8
Q1 201919.2
Q2 201917.1
Q3 201920.4
Q4 201917.4
Q1 202017.3
1) The raised tariffs came into force in Q3 2018.

Imported quantities of tariffed US-produced goods1)
KwartaalQuantity (x million) (million units)
Q1 20185.1
Q2 20185.2
Q3 20186.0
Q4 20182.8
Q1 20193.3
Q2 20191.9
Q3 20192.7
Q4 20193.9
Q1 20202.8
1) The raised tariffs came into force in Q3 2018.

The fact that importers and possibly consumers have to pay import duties (or additional import duties) is not a specifically European or Dutch phenomenon, as the study shows that Dutch exporters similarly did not lower their prices when the US imposed additional import duties on European steel and aluminium. These additional import duties were paid by US companies and consumers.

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.

Import duties levied on goods by country of origin
Land2019 (million euros)2018 (million euros)2017 (million euros)
United States317.0292.4256.1

To learn more about the impact of the many different types of trade policies, read the fourth-quarter edition of the Internationalisation Monitor 2020 on import tariffs and trade agreements. This edition examines not only the import tariffs that importers and exporters pay, but also how the cost of import tariffs is increased by international value chains. Finally, this Internationalisation Monitor provides new statistics on the free trade agreement with Canada (CETA), for example on the percentage of trade that is already taking place under this agreement.