Donald Trump baffles economists with tariff formula

Open the White House viewing newsletter for free

Your Guide to What is the US 2024 Choice for Washington and the World

Commercial economists have cursed the raw methodology used by Donald Trump, which calculated the list of “mutual” global tariffs applied by his control.

According to the US President’s program on Wednesday evening, the basic tariff of 10% will be taken from all countries that are excluded from Canada and Mexico, and countries with larger trading deficits with the United States.

The formula used to calculate tariffs Issued by a US trading representativeTogether with the United States, the trade deficit of each country took a proxy for its alleged unfair practice, then divided it in the amount of goods imported to the United States.

The resulting tariff is equal between the two ratio, which leads to countries like Vietnam and Cambodia, which sends large amounts of goods from the United States to import 46 and 49% punitive tariffs, respectively.

Unlike the United Kingdom, through which the United States had a surplus of goods a year only, only a 10% tariff for Canada and Mexico.

Economists claimed that the USTR methodology was deeply impossible economically and they would not manage to “drive bilateral trade deficiencies to zero farm.” They added that despite the insisting of the White House that “tariffs are working”, the remnants of the trade are governed by a number of economic factors, not just at tariff levels.

Thomas Sampson, Associate Professor of Economics of Economics in London, said that the resolution was “for the mercy of Trump’s wrong mania”, “said” no economic justification “. Tariffs:A number

Wider, Sampson noted that tariffs will not remove the macroeconomic driver underlying the US trade deficit. “Until the United States does not spar enough to finance its own contribution, it must be debt from the rest of the world. And it requires that it changes that logic.

USTR calculations, apparently, ignore the previous proposals of the administration that it will establish its mutual tariffs on the evaluation of the depth of bilateral trade, including taxes, regulation and other non-tariff barriers to trade.

Instead, the decision of George Saravos on the use of greater nominal trade deficits in Deutsche Bank was “highly mechanical” and will probably lead to the “free and open” talks with governance, as countries have moved to countries in the coming months.

Economists also attacked Trump’s obsession, zero by zero, because there would always be things that fans are not able to grow or improve.

Alexander Shepotilon, Econometric, Birmingham University, which recently simulated The consequences of the global trade war note that the use of economic resolutions has given the USTR document “The meaning related to the economic theory”, but in fact it was divided into the reality of trade economics.

“Resolution: .. Gives you a tariff level that will drop [the] Two-way trade deficit to zero. This is a crazy goal. There is no economic reason to have a balanced trade with all countries, “he said.

“Thus, in this sense, this policy is very unsatisfactory and cannot defend it at all.”

The result of the tariffs, which John Baghford, added to the trading economist in the center of the European Reform Center, would not be eliminated by trade deficit, but to pain both on both poor countries and US consumers.

The resolution throws sharply different results, depending on the surpluses of countries and the deficits with the United States. Vietnam hits 46 percent of additional tariff, meanwhile Australiawhich reports the deficit with the United States, like a Britain, is only at a minimum of 10 percent interest rate.

“This is a recipe for poor countries with large trade surcharges with the United States, not eliminating trade deficients with them. Their surpluses will pass other poor countries, “Springford said.

“It will also damage our consumers, as the passage of tariffs is higher than the requirements of the USTR. And the dollar assesses the consequences, damaging us.

Innes McFee, Advisory Oxford Economics, agreed.

Trying to search for some methods in Trump’s decision, PWC chief economist Barrette Kupelyan said that the “resolution” simply reflects Trump’s desire to increase US production imports.

He said.