| | | The countries hit hardest are the ones that we import the most $$$ from -- like vietnam and cambodia. They prospered as an alternative to china sourcing and are now screwed. And they have little bargaining power. This will take time to play out so I am keeping my finger off the BUY button.
clipped from CNN;
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President Donald Trump’s massive tariffs announced on dozens of nations Wednesday were pitched as “reciprocal,” matching what other countries charge the United States dollar for dollar, even taking into account non-tariff barriers like value-added taxes and other such measures. But the actual calculation the Trump administration used is not reciprocal at all. Instead, the Trump administration used quite a simple calculation: the country’s trade deficit divided by its exports to the United States times 1/2. That’s it.
For example, America’s trade deficit with China in 2024 was $295.4 billion, and the United States imported $439.9 billion worth of Chinese goods. That means China’s trade surplus with the United States was 67% of the value of its exports — a value the Trump administration labeled as “tariff charged to USA.”
“While these new tariff measures have been framed as ‘reciprocal’ tariffs, it turns out the policy is actually one of surplus targeting,” noted Mike O’Rourke, chief marketing strategist at Jones Trading, in a note to investors Wednesday. “There does not appear to have been any tariffs used in the calculation of the rate. The Trump administration is specifically targeting nations with large trade surpluses with the United States relative to their exports to the United States,” he added.
The simple calculation used by the Trump administration could have broad implications for countries America depends on for goods — and the global companies that supply them.
“Knowing how these rates were calculated highlights that they are generally going to be most severe on the nations that US companies rely heavily upon in their supply chain,” O’Rourke said. “It is hard to imagine how these tariffs would not wreak havoc upon the profit margins of major multinational corporations.”
NYT data:
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