Trump Administration's Tariff Formula Flawed, Think Tank Finds 50% Error

The Trump administration's tariff formula has been called into question by a conservative think tank, which has uncovered a significant error in the calculations. The think tank found that the White House had incorrectly used retail price elasticity instead of import price elasticity in its tariff formula. This mistake led to higher tariff rates than intended, raising concerns about the fairness and accuracy of the tariff policy.

The tariff formula was designed to impose reciprocal tariffs on imports from countries with which the U.S. had a significant trade deficit. The calculation involved dividing the trade deficit with each country by the total value of imports from that country, and then halving the resulting figure to determine the tariff rate. However, the use of the wrong value in the calculations resulted in tariffs that were higher than necessary. For instance, the small African country of Lesotho was subjected to the highest "reciprocal tariff" of 50 percent, while several major Southeast Asian countries also faced very high tariffs.

Critics argue that the use of an incorrect value in the calculations was a deliberate attempt to manipulate the tariff rates. One analyst stated that "this whole thing was rigged," raising questions about the transparency and integrity of the tariff formula. The think tank's report has called for a review of the tariff formula and for the administration to use accurate and transparent methods in calculating tariffs.

The conservative think tank's findings have sparked criticism of the Trump administration's approach to tariffs. The use of an incorrect value in the calculations has raised concerns about the potential impact of the tariffs on the U.S. economy and its trading partners. Critics argue that the higher tariffs could lead to increased prices for consumers and businesses, as well as potential retaliation from trading partners. The think tank's report has called into question the administration's commitment to fair and accurate trade policies, and has highlighted the need for greater transparency and integrity in the tariff formula.