debut: 2/16/17
38,910 runs
..........Formula for Tariffs
The Trump administration used a simple formula: It took each country’s trade deficit with the US, divided it by the value of that country’s exports to the US – and then divided this figure by half, in a gesture of “kindness.”Let’s take this step-by-step, using official US data and the example of Vietnam, which President Donald Trump claimed imposed a 90% tariff on US goods and therefore would get a 46% “reciprocal” tariff of its own.
In 2024, Vietnam, a massive and growing global manufacturing hub, sold $136.6 billion worth of goods to the US.Because Americans want to buy things like Nike shoes a lot more than Vietnamese want to buy things like Ford cars, the US sold a lot less to Vietnam. Vietnam bought just $13.1 billion of goods from the US that same year.
Subtracting $13.1 billion from $136.6 billion gives Vietnam a trade surplus of $123.5 billion with the US. But one man’s trade surplus is another man’s trade deficit – which Trump has made clear he finds unpalatable, akin to being “ripped off.”
Dividing the $123.5 billion by $136.6 billion (the value of Vietnam’s exports to the US) gives 0.90 – or, in percentage terms, 90%. In a supposed act of “kindness,” Trump nearly halved this, meaning Vietnam will “only” now face a tariff of 46%.
CNN
