How was Donald Trump’s tariff?

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Ben Chu and Tom Edington

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US President Donald Trump imposed a 10 % tariff on goods from most of the countries that are imported to the United States, with the high rates of what he calls “the worst criminals”.

But how did these definitions be identified mainly on imports -? BBC Check the accounts behind the numbers.

What were the accounts?

The White House holds the screen in the formula used by the White House used to calculate the tariffsWhite House

The formula shared by the White House

But the actual exercise has faded into simple mathematics: Take the trade deficit of the United States in goods that contain a specific country, and this is divided under the total number of goods from that country and then divided this number by two.

A commercial deficit occurs when a country (imports) buy material products from other countries more than selling them (exports) to them.

For example, the United States buys more goods from China more than it sells – there is a deficit in goods of $ 295 billion. The total amount of goods you buy from China is $ 440 billion.

Divide 295 by 440 up to 67 %, dividing it by two and turning up. So the tariff imposed on China is 34 %.

Likewise, when it applies to the European Union, the White House formula resulted in a 20 % tariff.

The BBC Draw shows how the White House methodology works

Is Trump’s tariff “mutual”?

Many commentators indicated that these definitions are not mutual.

The mutual may mean that it was based on what is already charged between the United States in the form of the current customs tariff, as well as the barriers other than fire (things like regulations that increase costs).

However, the official White House systematic curriculum document shows that it did not count this to all the countries that were imposed on definitions.

Instead, the tariff rate has been calculated on the basis that it will remove the trade deficit in the United States with each country.

Trump has exploded from the formula in imposing definitions on countries that buy more goods than the United States than they sell.

For example, the United States currently does not manage a commercial deficit of goods with the United Kingdom. However, the UK was exposed to a 10 % tariff.

In total, more than 100 countries are covered by the new tariff system.

“Many of the broader effects”

Trump believes the United States is getting a bad deal in world trade. In his opinion, other countries immerse the American markets with cheap commodities – which hurt American companies and cost jobs. At the same time, these countries put barriers that make us less competitive products abroad.

So using the customs tariff to eliminate the trade deficit, Trump hopes to revive manufacturing and protect jobs.

Reuters is a man wearing a jacket says "Trump car workers" He sits in the garden of roses during the Trump title on Wednesday evening. He also wears a Bisbul hat, surrounded by other men at work. Reuters

The American auto industry is one of the manufacturing sectors that Trump is keen to revive

But will the new tariff system achieve this desired result?

BBC spoke to a number of economists. The overwhelming view is that although the customs tariff may reduce the inability of the goods between the United States and the individual countries, it will not reduce the total deficit between the United States and the rest of the world.

“Yes, it will reduce the bilateral trade deficit between the United States and these countries. But it is clear that there will be many broader effects that are not captured in the account,” says Professor Jonathan Portz of Kings College in London.

This is because the current general deficit of the United States not only leads through commercial barriers, but through how the American economy works.

For one of them, the Americans spend more and invest more than they earn, and this gap means that the United States buys more than the world more than it sells. As long as this continues, the United States may continue to continue to operate the deficit despite increasing customs tariffs with global trade partners.

Some trade deficit can also be found for a number of legitimate reasons – not only to customs tariffs. For example, buying food is easier or cheaper to produce it in the climate of other countries.

“The opposite formula is designed to rationalize shipping fees on countries with a trade deficit,” said Thomas Sampson of the London Economy College.

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