More or Less: Behind the Stats Trump tariffs: All about the deficits
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Apr 4, 2025 The discussion dives into the controversial tariffs introduced by Trump, questioning their supposed purpose of addressing trade imbalances. Tariff calculations reveal complexities that challenge the administration's claims. The podcast further examines the exclusion of service exports in trade calculations, shedding light on how countries can still thrive despite apparent deficits. Misconceptions about bilateral trade deficits are addressed, encouraging a broader perspective on global trade dynamics.
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Misleading Tariffs
- Trump's "reciprocal tariffs" are misleading.
- They don't reflect actual tariffs other countries impose on the US.
Tariff Calculation Method
- The tariffs are calculated based on each country's trade deficit with the US, not existing tariffs.
- This calculation involves halving the deficit as a percentage of exports to the US, with a 10% minimum.
Lesotho's Diamond Trade
- Lesotho, a poor African nation, primarily exports diamonds to the US but imports little.
- This leads to a large trade surplus, resulting in a 50% tariff despite not imposing trade barriers.