6.5M
PUU.S. President Donald Trump has been asked about his methodology for calculating the latest round of tariffs.
His response emphasized a basis in “common sense,” trade deficits, historical treatment, and “raw numbers”.
More specifically, the Trump administration’s formula appears to involve:
Trade Deficit and Exports: Calculating the U.S. trade deficit in goods with a particular country, dividing that by the total imports from that country, and then halving the result.
10% Floor: Implementing a 10% minimum tariff for all countries, even those with whom the U.S. has a trade surplus.
However, some countries, like Brazil, have faced tariffs (50%) that seem driven by political considerations in addition to the stated economic formula. The administration’s approach to calculating these tariffs has faced criticism for being overly simplistic and for potentially causing economic harm to American consumers and businesses.
It’s important to note that the Trump administration has used various legal authorities to impose tariffs, including Section 232 (national security) and the International Emergency Economic Powers Act (IEEPA), the latter of which is currently being challenged in court.
@purpleroom_politics
