The latest trade index released by the Tholos Foundation has placed the United States in a moderate 61st position out of 122 countries. This ranking reflects various barriers to trade, including tariffs and non-levy restrictions, and was unveiled this week by the think tank established by former President Ronald Reagan in the 1980s.
The United States’ relatively low ranking is attributed to its significant non-tariff trade barriers and a limited number of international trade agreements. These findings were presented along with a report that noted the index was compiled prior to former President Trump’s widely discussed announcement regarding ‘reciprocal tariffs,’ which have been temporarily suspended for 90 days pending negotiations. Should these tariffs be implemented, the United States could fall dramatically to a dismal 113th position overall, securing the last place regarding tariffs, according to the Tholos Foundation.
Barriers and economic impact
The Tholos Foundation’s index evaluates both direct and indirect trade barriers across 122 countries, representing regions that account for 80% of the global population and 97% of the world’s Gross Domestic Product (GDP). Countries such as Hong Kong, Singapore, and Israel are recognized for having the fewest trade barriers, while Russia, India, and Indonesia rank the lowest due to their extensive use of trade restrictions.
“The Index finds countries with lower trade barriers experience more prosperity, economic freedom, and environmental performance,”
the foundation stated in a press release. The analysis revealed that although the 18 most open countries comprise only 5.35% of the global population, they contribute to an impressive 21% of global GDP. In stark contrast, the three most restrictive nations account for 21% of the population but only a mere 6% of global GDP.
Regional disparities in trade practices
Interestingly, the index highlights that lower-income countries in South Asia and Central Eastern Europe tend to rely more heavily on tariffs, whereas wealthier nations are more inclined to impose non-tariff barriers and increasingly restrict digital commerce. Additionally, the data shows that lower and middle-income countries in South Asia and Latin America are those that impose the most limitations on services.
The index is structured around four main pillars: tariffs, services restrictions, non-tariff barriers, and trade facilitation, the latter examining conditions behind borders that influence trade dynamics.
Furthermore, the index criticizes the European Union for its regulatory impact on trade, stating: “The regulations in the Digital Markets Act, Digital Services Act, AI Act, the proposed Cloud Certification Scheme, and others from the European Union impose restrictions that discriminate against content, market size, as well as the physical location of data storage and processing.” This assertion suggests that such regulations have prompted foreign companies to limit their hardware and software releases in the EU market, resulting in voluntary export restraint as exporters avoid jurisdictions laden with stringent regulations.