Gross Domestic Product (GDP) is a measure of the goods and services produced by a nation’s economy, valued at current market prices. Market prices reflect the incomes earned from production, including taxes paid on production and imports that accrue to governments. A tariff is a customs duty levied on foreign-produced goods that enter the domestic economy as an import.
Within BEA’s National Economic Accounts, customs duties are reflected in series featured in both the National Income and Product Accounts (NIPAs) as well as the Industry Economic Accounts (IEAs).
- The U.S government’s receipt of customs duties are a detailed component of the NIPA aggregate series “taxes on production and imports” (TOPI). Annual estimates of customs duties are presented in NIPA table 3.5 and quarterly estimates are presented in table 3.5U. (See line 15 in both tables for customs duties.) BEA estimates of customs duties are based primarily on federal government receipts data in the Treasury Department’s Monthly Treasury Statement.
Customs duties are levied specifically against imported goods. The treatment of custom duties in the NIPAs is similar to how taxes on production are recorded. Income generated from the levy accrues to the federal government, not to the domestic businesses involved in the importation, distribution, or sale of the imported good.
The income earned by the government from customs duties (as well as all other TOPI) is included in the market value estimate of GDP and its companion measure Gross Domestic Income (GDI).
- For GDI, TOPI is a single line item presented in NIPA table 1.10.
(See line 7.) There is no breakout for customs duties. - Within GDP, the portion of final expenditure for goods attributable to TOPI cannot be separately identified from the underlying source data used to estimate the detailed components.
- The value of goods imports presented in NIPA table 4.2.5 do not reflect customs duties. (Accordingly, the price indexes used to deflate imports – import price indexes from the Bureau of Labor Statistics International Price Program – also do not reflect customs duties).
Within the IEAs, the value added of industries also reflect market prices and include TOPI remitted to governments.
- The IEA table Components of Value Added by Industry presents annual estimates of industry value added, decomposed into returns to labor (“compensation”), businesses (“gross operating surplus”), and governments (“TOPI less subsidies”). Customs duties are included in line 135, which presents total TOPI remitted by the wholesale trade industry (net of subsidies received) to governments.
- BEA’s supply tables provide annual estimates of the allocation of customs duties by commodity, in the column labeled “import duties.”