US President Donald Trump while announcing the list of tariffs on Wednesday, repeatedly said that all the tariffs will be imposed are reciprocal, reflecting the barriers these countries held to US goods. However, there was no explanation on how these tariffs were calculated.
After the tariff chart was released by the White House, a report by the New York Times said that the new rates appeared to have been derived by first looking at the trade deficit that the US has with a country and then dividing it by the value of the goods that country exports to the US.
Then, as Trump said he was being “kind,” the final tariff was actually cut in half.
While speaking to the media in a briefing earlier, the White House officials explained that the tariff figures were calculated by the Council of Economic Advisers using established methods, the New York Times reported. They said the model was based on the idea that the US trade deficit with any country reflects the unfair trade practices and “cheating” done by that country.
The White House later clarified how the calculations were done. Although the explanation used some complex math, it confirmed that the formula is based on the US trade deficit with a country, divided by that country’s exports, the report said.
Emily Kilcrease, the director of the Energy, Economics, and Security Program at the Center for a New American Security, and a former deputy assistant US trade representative, said that planning a perfect tariff rate is always challenging, the NYT report said. She added that, given the urgency of the situation, it looks like the Trump administration created an estimate that fits their policy goals.