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“Simplistic” tariffs threaten global economy infographic
Graphic explains formula used to calculate “reciprocal” tariffs
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“Simplistic” tariffs threaten global economy

By Phil Bainbridge

April 4, 2025 - After months of work, the White House announced “reciprocal” tariffs designed to match barriers to U.S. trade based on the U.S. Trade Department’s seemingly complex formula, described by experts as simplistic.

Reciprocal tariffs mean applying the same tariffs that another country is applying to your own goods. Instead however, the tariff rates are based only on the U.S trade imbalance with the rest of the world, and do not include attempt to address other “non-tariff barriers” - as it had originally been claimed. There are many reasons for a trade imbalance, particularly among poorer countries where there is little demand for expensive U.S. goods but has become part of the supply chain to supply Americans with cheaper products.

U.S. President Donald Trump had made much of the fact that the tariffs would factor in a multitude of other barriers to trade - including VAT, which the Administration considers a tariff even though it applies to both domestic and imported goods.

Trump claimed to have been “kind” in only hitting countries with half the tariffs he believes they impose on the U.S. but even that will almost certainly affect prices in the U.S., and, as the world’s largest economy threaten the rest of the world too.




Sources
PUBLISHED: 04/04/2025; STORY: Graphic News
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