James Surowiecki on Trumps Tariffs

James Surowiecki
Source
https://x.com/JamesSurowiecki/status/1907559189234196942
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Author
Ben Werschkul

https://finance.yahoo.com/news/live/trump-tariffs-live-updates-steep-liberation-day-tariffs-rock-markets-reverberate-across-the-world-191201769.html

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Here's how the White House came up with the 'reciprocal' tariff numbers
As they announced their reciprocal tariff plans on Wednesday, the Trump administration said a wide array of practices would go into their calculations from existing tariffs to currency manipulation to value-added taxes to agricultural constraints.

But after the numbers were released, it became increasingly clear that the calculations were perhaps much simpler.

“They didn't actually calculate tariff rates + non-tariff barriers,” posted author James Surowiecki, who was one of the first to notice the trend. “Instead, for every country, they just took our trade deficit with that country and divided it by the country's exports to us.”

He added the example that "we have a $17.9 billion trade deficit with Indonesia. Its exports to us are $28 billion. $17.9/$28 = 64%."

It was an approach that was subsequently confirmed by other calculations and the latest evidence of Trump’s decades-long fixation with trade deficits above all else.

In a call with reporters Wednesday, a senior administration official largely confirmed the approach saying the calculation was made by Trump’s Council of Economic Advisors and was "based on the concept that the trade deficit that we have with any given country is the sum of all the unfair trade practices, the sum of all cheating."

The official added that this week’s invocation of an emergency was put forth with an overall goal of driving the trade deficit “back towards zero.”