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‘Economists have been flabbergasted’ at how White House calculated tariffs
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Apr 3, 2025
US President Donald Trump on Wednesday announced sweeping new tariffs on imports to the United States from countries right across the globe. "Some economists have figured out how these tariffs were calculated by the White House and its team," said FRANCE 24's Washington DC correspondent Fraser Jackson. "These economists have been flabbergasted at how cumbersome these equations are, saying the US took the trade deficit that it has with a given country and divided it by the imports from that country, which is a very clunky way of doing things and not as surgical as you would expect."
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Well, Fraser, can you lay out in a little more detail these measures
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So these tariffs are basically as we expected. There's going to be a baseline tariff, 10%, which is applied to every country
0:14
And then there's a list of about 60 or so nations that the US themes the worst offenders
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And they have, on top of that 10%, a reciprocal tariff slapped on them as well
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Now, Donald Trump says he's being kind and only slapping half of the tariffs
0:29
that these nations charge the US to make the final number. Now, that basically equates to
0:35
34% on China, although it is currently unclear if that is on top of existing
0:42
tariffs that the US already has on China. The White House has not clarified
0:45
that, and 20% on the EU as well. We're also expecting specific measures on
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different sectors as well, like semiconductors, copper, pharmaceuticals, and that auto industry tariff as well
0:57
worth 25% on foreign. and made cars as well that Donald Trump has also announced. Interestingly, low and importantly
1:05
these new tariff measures that were announced do not include Canada or Mexico the US two biggest trading partners They are still subject to 25 tariffs with some cutouts that have been on hold in recent weeks That on and off again has really been a bit of a pinball trying to keep a track of over the course of the last few weeks
1:25
But we are expecting that to come into effect once again in the next couple of days
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Now, reading some of the reaction online to these tariffs, some economists have figured out the way that these were calculated by the White
1:39
House and its team. And these economists have been flabbergasted at how cumbersome these
1:45
equations are, basically saying that the US took the trade deficit that the US has with said
1:50
country and divided it by the imports from that country, which is a very clunky way of doing
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things and not as surgical as you would expect. Some countries, though, however, of course
1:59
have tried to stave off these tariffs. The White House, though, said that it was too little
2:04
too late. A senior White House official that we heard from said, quote, this is not a negotiation
2:09
It's a national emergency. And they said that the biggest problem was not necessarily tariff, the tariffs themselves
2:17
but actually non-tariff barriers. So things like quotas, import licences, embargoes and things like that
2:23
So there are still some countries however trying to work their way around these tariffs But right now they will be coming into effect in the next couple of days a minimum of 10 but some nations paying drastically more than that
2:35
Well, obviously, none of these trading partners are happy about the move
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So what is some of the backlash we're expecting, and what are we already seeing from some of these partners
2:47
Well, some sources that I'm talking to feel like they've gotten off lightly
2:51
and escaped the bigger raw thought. they could have had. The UK, for example, has got escaped with a 10% base tariff, but a source
3:00
that I'm talking to from the UK says that they're still hoping to get some kind of trade deal
3:05
with the United States to basically get that down near enough towards zero. So that is still
3:11
something that will continue. But of course, the EU, for example, is not in that boat. They have
3:17
been slapped with a 20% tariff. And a source that I spoke to from Europe said that this was
3:22
basically their worst case scenario and they might have been able to let a 10
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tariff slide but a 20% tariff will likely be retaliated against. Now we heard
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from Ursula von der Leyen who said there seems to be no order in the disorder
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no clear path to the complex complexity and chaos that is all the US training partners are hit with She also says that she agrees with President Trump and says that others are taking unfair advantage of the current rules
3:50
But she also said that Europe is strong and Europe has everything it needs to make it
3:54
through the storm. She says, we are in this together. If you take on one of us, you take on all of us
3:59
Now, Europe is looking to negotiate first and foremost with the United States
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But they have not taken off the table more retaliation. But of course, Donald Trump has threatened to escalate
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that if, indeed, a trade war does start between the EU and the US, threatening maybe 200% on wine and champagne as well
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The other country that's really taking stock are the Canadians. They are subject to 25% tariffs on goods like steel and aluminium
4:26
They are set to come back. Mark Carney, the temporary prime minister, said that he's going to fight these tariffs
4:31
He's also convening a meeting of provincial leaders, and is likely to announce a wider Canadian reply after that meeting, which is expected on Thursday
4:39
day. And finally, there's been some rebuke here at home as well for Republican senators joining with the Democrats to pass the bill to block tariffs on Canada, although it should be said that is likely something which will not be seen by the House. And therefore will not make it to Donald Trump's desk, but a rare rebuke of Donald Trump's tariffs on Canada on Capitol Hill
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