This article from EL PAÍS exposes the deceptive nature of Donald Trump's so-called "reciprocal" tariffs. While presented as a complex calculation, the formula employed by the Department of Commerce to determine tariff levels primarily considers the trade deficit and imports from each country.
The actual formula divides the trade deficit by the total imports from a particular country, resulting in a percentage. This percentage is then halved, ostensibly as a demonstration of benevolence. The article provides examples: a 39% deficit with the EU becomes a 20% tariff, while a 67% deficit with China is reduced to 34%.
The article points out that despite the existence of a methodology which stated the consideration of five elements, only the trade deficit was considered. In a call with reporters, Trump administration officials implicitly admitted to ignoring non-commercial barriers, claiming the trade deficit is the sum of unfair trade practices. The article provides this claim as absurd. In addition, the article points that Trump's administration did not consider factors such as Value Added Tax (VAT), even though he stated previously he would consider it.
The article highlights Trump's misleading statements, including his claims of reciprocal tariffs, of "reducing tariffs by half" out of "benevolence", and offering a simple response: "if they want zero tariffs, they should build their products in the US."
The article concludes by citing statistician Nate Silver's comment describing the methodology as a "stupid academic paper" that masks a simple calculation behind complex symbols.