Most economists will tell you that the global economy is an incomprehensibly complex, dynamic and interconnected system that no person can fully understand.
The Trump administration has taken this message to heart and apparently to use a comparison at primary school level to calculate the mutual rates of 'Liberation Day' that have sent the global markets.
Donald Trump spoke last night in the rose garden of the White House and said that the rate of his rates for each nation had been called by taking into account the 'combined rate of all their rates, non-monetary barriers and other forms of cheating'.
An official of the White House later stated that the rates were 'the fairest in the world', the addition of the figures had been agreed by the Council of Economic Advisors based on 'the sum of all commercial practices' by other countries – in other words, an incredibly complicated and detailed web of various measures and checks.
However, it seems that Trump's advisers have arrived at their figures:
Take the total trade deficit that America has with a certain country. Divide that number through the value of the export from that country to the US.
Then divide each song that is half of 'friendliness'.
Take, for example, China, for example, with which America ran a trade shortage of $ 291.9 billion last year. Beijing exported $ 433.8 billion in goods to the US. Divide the previous figure through the last one and you are left with a number of 0.6728 – displayed differently as 67%.
That is the rate percentage that the US claims that China imposes all trade from Washington. Cut that figure in two and you remain 33.5%.
Around that on and you have 34% – the exact rate percentage that the Trump administration has hit on China.
This horribly simple approach – applied to many of the countries on the list – was first squatted by financial journalist James Surowiecki in a post on X, which encouraged a whole series of other analysts and experts to lamper the calculations of the Trump administration.
Paul Krugman, professor of economics at the City University of New York, said that Trump had become 'full-on crazy', while Scott Lincicome, vice-president of General Economics at the Cato Institute, responded to confirmation about writing X: “This is insane.”
Vice president of the federal tax policy with the Think Tank Erica York of the Tax Foundation added: “This is just embarrassing.”
And Stephen Innes, managing partner of Spi Asset Management, said: 'President Trump entered the rose garden and exploded the most aggressive commercial shock that the market has seen in decades. This is not a puncture – it is a complete hay maker. '
President Donald Trump holds a gigantic graph that shows some of the mutual rates. His administration is planning to accuse abroad. Each country will be charged at least a rate of at least 10 percent to import goods to the US
Donald Trump confirmed that the UK will not escape the pain of taxes that he claims will restore 'fairness' in world trade
After Trump's announcement, the American trade representative issued a statement in which the approach to tariff calculations was defended.
It said that the calculations had 'produced' the combined effects of a country with regard to the US, with the argument that 'the trade deficiency effects of tens of thousands of rates, legal, tax, tax and other policy in every country are individual complex, if not impossible'.
But this argument was rejected as an excuse from Emily Kilcrease, the director of the Energy, Economics and Security Program in the Center for a New American Security and a former deputy assistant -Amarican trade representative.
“It would always be a very difficult exercise to come up with a very precise mutual rate percentage,” she told the New York Times.
“Given what their desire seems to be to get something out quickly, it seems that they have an approach that is consistent with their policy goals.”
Other analysts pointed out that the calculations only appear to take into account the total value of goods when it comes to the trade deficit of America and left the value of services.
This supervision could make the US vulnerable to retribution – in particular the thriving technology companies of America.
They fall into the services category, where the US exports considerably more than it imports to many partners, including the EU.
It is worth noting that not all countries were subjected to Trump's major tariff calculations.
Many, including the UK, only have to fight with a basic rate of 10% applied by Trump to foreign goods imported on the US.
But the comparison proposed by Surowiecki has returned the correct results for at least two dozen of the countries mentioned on the Liberation Day rate, and within one or two percentage points for another two dozen, according to the FT.
Trump's policy of mutual rates is born of his long -term conviction that the US will be scammed – and that the trade deficit with foreign nations is and must be eliminated with foreign nations.
But many analysts claim that the American trade deficit not only means that countries have used Washington worldwide with unfair trade agreements, cheap imports and downright cheating.
On the contrary, the US trade deficit is influenced by a large number of factors, not least the enormous debt of America – which is currently approximately 5.5% of GDP – and decades of globalization in which the US itself outsourced production and tried to lower labor costs.
The first of eight pages with mutual rates that the White House announced during Wednesday's event in the Rose Garden
Mr. Trump seemed to have deliberately waited until the markets were closed to make his announcement
A drone display shows containers in the terminals in the harbor in Kwai Chung in Hong Kong, China, April 3, 2025
Trump insists that the import load on foreign nations and economic blocks, ranging from 10% to 49%, would go back to the US and do other countries what he says they have done with America for a long time.
“For decades, our country has been looted, looted, raped and looted by nations nearby and distant, both friend and enemy,” Trump said in his comments from the White House, who ran 49 minutes.
The administration called the US trade deficit as the legal justification for the 'national emergency situation' so that Trump can impose the rates.
“Taxpayers have been scammed for more than 50 years,” he said. “But it's not going to happen anymore.”
