elmundo.es
Trump Imposes High Retaliatory Tariffs Based on Flawed Trade Deficit Calculation
The Trump administration announced retaliatory tariffs on several countries, calculating them based on trade deficits rather than actual tariffs, resulting in an average tariff rate of roughly 29%, the highest in a century and disproportionately impacting smaller nations.
- What is the methodology used by the Trump administration to calculate the retaliatory tariffs, and what are the key flaws in this approach?
- On Wednesday, the Trump administration announced retaliatory tariffs on various countries, claiming that these tariffs were calculated based on the combined rate of tariffs, non-monetary barriers, and other trade restrictions imposed by those countries on US goods. The administration stated that the tariffs would only be approximately half of what other countries charge, showcasing a perceived act of leniency. However, this method has been criticized for its inaccuracy and arbitrary nature.
- How does the administration's calculation of tariffs differ from standard economic practice, and what are the implications of this difference?
- The calculation method used by the Trump administration involved dividing the US trade deficit with a specific country or bloc by the total value of US imports from that entity. This method is flawed because it only considers goods and ignores services, and it fundamentally misrepresents trade barriers as equivalent to trade deficits. The resulting average tariff rate of approximately 29% is exceptionally high, exceeding even the Smoot-Hawley tariff.
- What are the potential long-term economic and geopolitical consequences of imposing these unusually high tariffs, particularly for smaller and poorer nations?
- The Trump administration's approach to calculating retaliatory tariffs demonstrates a disregard for standard economic principles and a distortion of trade data. The arbitrary nature of the calculation, combined with the disproportionate impact on smaller and poorer countries, raises concerns about the economic and geopolitical consequences of these tariffs. This methodology could severely damage the economies of smaller countries and further escalate international trade tensions.
Cognitive Concepts
Framing Bias
The framing heavily favors Trump's perspective. The headline and introduction highlight the incredulity of other governments, presenting Trump's actions as illogical and unfounded. However, the article's detailed explanation of the flawed methodology used to calculate tariffs is largely presented after the initial framing, potentially influencing the reader's initial perception.
Language Bias
The article uses loaded language such as "extraña representación gráfica", "falsas", "fraude", "despropósito", and "salvajemente", which carry negative connotations and cast Trump's actions in a critical light. More neutral alternatives could be used, such as "unusual graphic representation", "inaccurate", "miscalculation", "economic discrepancy", and "significantly".
Bias by Omission
The analysis omits discussion of potential contributing factors to the US trade deficit, such as the strength of the dollar, US fiscal deficits, or the price competitiveness of US goods compared to those from less wealthy nations. This omission prevents a complete understanding of the trade imbalance and the fairness of the retaliatory tariffs.
False Dichotomy
The article highlights a false dichotomy by presenting the trade deficit as solely caused by other countries' actions, ignoring internal economic factors within the US. This oversimplification frames the issue as a simple matter of reciprocal tariffs rather than a complex economic problem.
Sustainable Development Goals
The article highlights that Trump's tariffs disproportionately harm smaller, poorer countries with no trade surpluses with the US, exacerbating existing economic inequalities. This action undermines efforts to reduce global inequality, as it inflicts greater harm on less developed economies struggling to compete in the global market. The arbitrary nature of the tariffs, based on trade deficits rather than actual trade barriers, further intensifies the negative impact on vulnerable economies.