讀後心得

The new tariffs announced by the Trump administration are based on existing trade balances, deviating from previous commitments. The U.S. Trade Representative detailed the calculation method in a statement, which is based on 2024 data. It takes the ratio of a country's trade surplus with the U.S. to its total exports to the U.S., then divides by two to arrive at an equivalent tariff rate. For example, China has a trade surplus of $295 billion with the U.S. and total exports to the U.S. amount to $438 billion, resulting in an equivalent tariff of 34%. The same method can be applied to economies like Japan, South Korea, and the European Union, which will face a uniform equivalent tariff of 10%. The Trump administration emphasized that while the specific influencing factors are complex, this calculation helps achieve the goal of reducing the trade deficit. It is noteworthy that the announced tariff rates differ from the figures in the executive order. Trump's formula also considers import demand and price elasticity.

According to foreign reports, the new tariffs of the Trump administration in the United States are mainly based on the calculation of the existing trade balance, which is different from his previous commitment to match tariffs and trade barriers with other countries. The U.S. Trade Representative explained the calculation method of the new tariffs in a statement on Wednesday evening, providing a specific formula: based on data from the U.S. Department of Commerce in 2024, a country's trade surplus with the U.S. is divided by its total exports to the U.S., and then the resulting number is divided by two to arrive at the so-called equivalent tariff rate.

• Taking China as an example, last year China's trade surplus with the U.S. was $295 billion, and total exports to the U.S. amounted to $438 billion. Dividing the two gives a ratio of 68%. According to Trump's tariff formula, dividing this number by 2 yields an equivalent tariff rate of 34%.
• The same calculation method can also be applied to other economies such as Japan, South Korea, and the European Union to predict their equivalent tariff rates.
• For trade partners where the U.S. enjoys a trade surplus, they will uniformly face a 10% equivalent tariff, even countries with a basic trade balance are not exempt.

The statement from the Office of the U.S. Trade Representative noted that while the actual barriers' tariff rates can technically be calculated, this method would help Trump achieve the goal of reducing the trade deficit. Although separately calculating the numerous tariffs, regulations, taxes, and other policies affecting the trade deficit for each country is quite complex, these factors' combined effects can be substituted by designing a tariff level that meets the goal of reducing the bilateral trade deficit to zero.

Prior to Trump's statement, the method for calculating the equivalent tariff was unclear. More confusingly, the rates Trump announced slightly differed from those listed in the accompanying text of his executive order. For instance, in the case of South Korea, the rate displayed on the announcement board was 25%, while the rate in the attached document was 26%.

The Trump administration had indicated that the calculation of the rates would take into account both tariffs and non-tariff barriers, including all taxes. The rates listed on the announcement board were categorized under "tariffs imposed on the U.S. (including currency manipulation and trade barriers)." In the memorandum prepared on February 13 regarding the equivalent tariffs, Trump ordered a "comprehensive scope analysis review of non-reciprocal trade relations with all U.S. trading partners, including their tariffs, taxes, non-tariff barriers, currency manipulation, and other unfair restrictions on market access or practices that create structural barriers to fair competition." The memorandum did not explicitly list trade balances but noted that non-reciprocal trade is "the root of the large trade deficit in goods the U.S. continues to face every year."

Trump's tariff calculation formula also includes two additional parameters: the price elasticity of import demand and the elasticity of import prices to tariffs, which can effectively offset each other, summing to an equivalent of multiplying by 1.