A Computational Error May Be Driving the Size of the Tariffs
In an American Enterprise Institute article, Kevin Corinth and Stan Veuger claim that the Administration made a mistake when figuring the “reciprocal” tariffs that are the basis for its the schedule of tariffs released last week:
The formula for the tariffs, originally credited to the Council of Economic Advisers and published by the Office of the United States Trade Representative, does not make economic sense. The trade deficit with a given country is not determined only by tariffs and non-tariff trade barriers, but also by international capital flows, supply chains, comparative advantage, geography, etc.
But even if one were to take the Trump Administration’s tariff formula seriously, it makes an error that inflates the tariffs assumed to be levied by foreign countries four-fold. As a result, the “reciprocal” tariffs imposed by President Trump are highly inflated as well.
The alleged erro
Article from Reason.com
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