Trump made a big presentation about tariffs on April 2, held up a chart, and his administration later published a formula of how they calculated the tariffs. The short takeaways are:
- The formula doesn’t calculate what it claims to calculate, and indeed obfuscates what they’re really doing. In reality, all the formula calculates is the percentage trade deficit we have with a country.
- Trump is putting a 10% tariff on countries with which we have a trade surplus, just because.
- On average, the US consumer will pay 10.25% more on everything we buy from other countries, from eggs to car parts.
I found two excellent videos explaining the math in some detail. The first, following, is from CBS News. I list it first because it’s more succinct and easier to follow. It also shows more plainly why the Trump formula is bogus and how two of its terms cancel each other out. They’re just for show.
The second video is from British math educator Matt Parker. It goes into more detail (sometimes a bit rambling) demonstrating the Trump formula is a gross oversimplification and points more specifically to government data sources:
I have a master’s degree in mathematics and I endorse these explanations, although the math is 4-function pocket calculator level.
