US tariffs drop to 9.4% with 10% blanket levy

February 26, 2026 (MLN): The United States’ effective tariff rate (ETR) has declined to 9.4% from 12.7% following the imposition of a 10% blanket reciprocal tariff on most trading partners, according to Fitch Ratings.

The ratings agency noted that if the administration raises the levy to 15% the maximum permitted under current legal authority the U.S. ETR would climb to 11.3%.

President Donald Trump moved quickly to restore tariffs after the U.S. Supreme Court ruled on February 20 that the earlier reciprocal tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were invalid.

The new 10% across-the-board tariff has been implemented under Section 122 of the Trade Act of 1974. This provision allows the president to introduce temporary tariffs of up to 15% for a period of 150 days, unless Congress votes to extend them. However, Section 122 does not permit country-specific adjustments.

Fitch explained that the revised 9.4% ETR reflects exemptions previously granted under the IEEPA-based tariffs. These carve-outs cover passenger vehicles, pharmaceuticals, goods compliant with the United States-Mexico-Canada Agreement (USMCA), and selected electronics.

The broader outlook for existing trade agreements remains uncertain, as the administration continues to deploy tariffs as both a fiscal tool and a policy instrument.

Before the Supreme Court’s decision, China faced two separate duties: a 10% fentanyl-related tariff applied to all imports and an additional 10% reciprocal tariff on a narrower range of goods.

These have now been merged into the single 10% blanket rate, lowering China’s effective tariff rate to approximately 19% from 29%.

Despite the reduction, China continues to face the highest ETR among major U.S. trading partners, followed by Vietnam, Japan, and Brazil.

Among the 31 largest U.S. trading partners, 26 are expected to experience a decline in their effective tariff rates under the new regime.

Brazil records the most significant improvement, with its ETR falling by 18% points to 11% from 29%.

For most nations, the transition to the Section 122 framework leaves effective tariff rates largely unchanged. Fitch emphasized that no country will see an increase in its ETR as long as the blanket tariff remains at 10%.

If the rate is lifted to 15%, however, the overall U.S. effective tariff burden would rise again, potentially reshaping trade dynamics in the months ahead.

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