Trump tariff formula misrepresents global trade economics, experts say

When President Donald Trump has declared his controversial tariffs for almost every trading partner in the world, he repeatedly calls them “reciprocal” – an answer, he said, to those nations who have affected the United States with tariffs and hurt the US economy.

But Trump’s claim is misleading not only because some of the nations have hit tariffs that have not charged any of the United States, but also because mathematics apparently used by the administration to go to the tariffs are not retained, according to several economic experts.

The White House Tariff List, issued to each place, includes different tariff rates. In the announcement of the Rose Garden tariffs on Wednesday, Trump claims that the numbers are calculated based on the “combined speed of all their tariffs, non -moneries and other forms of infidelity.” Trump added that he was “kind” and divided this number half and called it a “discount”.

The calculations for almost all tariffs are determined by dividing the trade deficit of each country by the value of its import, according to the analysis of economic experts. This issue was then half divided for Trump’s “discount” for the final rate of the tariff, experts said.

“Before yesterday, 99% of commercial economists have never seen such a formula like this,” Oren Ziv, an economics assistant at Michigan State University, told ABC News on Friday.

Several economic experts and journalists have blown up the formula shortly after a speech, including James Surietsi, a journalist and author of financial news, who explained it in a publication of X.

“So we have a $ 17.9 billion trade deficit with Indonesia. His export to us is $ 28 billion. $ 17.9 dollars = 64%, which Trump claims to be the tariff rate that charges us. What extraordinary nonsense is,” he said.

Later, the White House exposed an explanation of its calculations, which states that it uses the trade deficit and the import data.

“This calculation suggests that permanent trade deficits are due to a combination of tariff and non -tariff factors that prevent trade balancing. Tariffs work by directly reducing imports,” the White House said.

The director of the National Economic Council Kevin Khasece told Fox News on Thursday about the administration’s thinking behind their policy.

“So what happened was that the US sales representative looked at where the trade deficits were and adjusted tariffs to respond to the national emergency that I think we all agree,” he said.

ZIV said that this logic does not fit into the modern definition of commercial deficits.

“When economists study trade deficit, they find no evidence of this justification,” he said.

ZIV noted that the trade deficit is more linked to markets, not exports and imports and production.

ZIV said that the formula is not very likely to give the results the administration is looking for.

“From World War II, most industrial countries follow a consistent set of trade policy rules. In essence, they have learned that commercial wars are not helping anyone,” he said.