Trump Team Made a Critical Math Error When Calculating Extreme Tariff
The Trump administration's calculations justifying the most consequential tariff scheme of the last century are all wrong.
In an op-ed for The New York Times published Monday, economist Brent Neiman, whose research was used to justify the White House's implementation of reciprocal tariffs, wrote that the White House fundamentally misunderstood his work.
'My first question, when the White House unveiled its tariff regime, was: How on earth did it calculate such huge rates?' Neiman wrote in the op-ed. 'The next day it got personal.'
Shortly after the Trump administration announced its plan to implement tariffs of 10 percent or more on 90 countries—which it claims will eliminate the trade deficit but has only spurred global economic chaos—the Office of the United States Trade Representative published its methodology for the tariff calculations, citing a paper by Neiman and four other economists.
'But it got it wrong. Very wrong. I disagree fundamentally with the government's trade policy and approach,' Neiman wrote. 'But even taking it at face value, our findings suggest the calculated tariffs should be dramatically smaller—perhaps one-fourth as large.'
So if the White House had done the math right, and wanted its absurd trade plan to actually work, 20 percent tariffs should have been … 5 percent.
That wasn't the only mistake, Neiman pointed out. The Trade Office claimed its reciprocal tariff calculations would eliminate trade deficits with each American trading partner. Neiman concluded that is not a 'reasonable goal.'
'Trade imbalances between two countries can emerge for many reasons that have nothing to do with protectionism.… There are some reasonable arguments in favor of reducing the overall trade deficit, such as to reduce risks from our debt. But these arguments don't apply country by country,' Neiman wrote, further exposing the White House's lack of reasoning.
Even if all trade deficits are eliminated (which Neiman points out is basically impossible), reciprocal tariffs still won't work.
'The administration's tariff formula assumes that a tariff placed on one country won't affect imports from any others and ignores any implications for exports,' Neiman said. 'These assumptions may work for an action against one small trade partner, but not for the broad salvo announced last week.'
Neiman went on to decimate pretty much every justification the Trump administration has provided for tariff implementation, including its selective picking and choosing of his research results to support its claims.
'As a result of these and other methodological choices, Wednesday's reciprocal tariffs will bring average tariff rates to their highest level in over 100 years. I would strongly prefer that the policy and methodology be scrapped entirely. But barring that, the administration should divide its results by four.' Neiman concluded, a grim reminder of the economic chaos yet to come.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Washington Post
15 minutes ago
- Washington Post
‘Come and get me': Gavin Newsom has entered the meme war
California Gov. Gavin Newsom (D) has found himself in the center of the internet's spotlight after squaring off with President Donald Trump on social media over the deployment of military troops to counter protesters in Los Angeles. While police deployed tear gas and shot at protesters in Los Angeles with rubber bullets on Monday, Newsom shared a screenshot on TikTok of a Washington Post headline reporting that California would sue Trump over the National Guard's presence, paired with a trending sound sampled from the movie 'Mean Girls. ' The video was captioned 'We will not stand while Donald Trump illegally federalizes the National Guard' and was liked more than 255,000 times.

Associated Press
16 minutes ago
- Associated Press
Judge tosses lawsuit over Trump's firing of US African Development Foundation board members
A federal judge has tossed out a lawsuit over President Donald Trump's dismantling of a U.S. federal agency that invests in African small businesses. U.S. District Judge Richard Leon in Washington, D.C., dismissed the case on Tuesday, finding that Trump was acting within his legal authority when he fired the U.S. African Development Foundation's board members in February. In March, the same judge ruled that the administration's removal of most grant money and staff from the congressionally created agency was also legal, as long as the agency was maintained at the minimum level required by law. USADF was created as an independent agency in 1980, and its board members must be confirmed by the U.S. Senate. In 2023, Congress allocated $46 million to the agency to invest in small agricultural and energy infrastructure projects and other economic development initiatives in 22 African countries. On Feb. 19, Trump issued an executive order that said USADF, the U.S. Institute of Peace, the Inter-American Foundation and the Presidio Trust should be scaled back to the minimum presence required by law. At the time, USADF had five of its seven board seats filled. A few days later, an administration official told Ward Brehm that he was fired, and emails were sent to the other board members notifying them that they had also been terminated. Those emails were never received, however, because they were sent to the wrong email addresses. The four board members, believing they still held their posts because they had not been given notice, met in March and passed a resolution appointing Brehm as the president of the board. But Trump had already appointed Pete Marocco as the new chairman of what the administration believed to now be a board of one. Since then, both men have claimed to be the president of the agency, and Brehm filed the lawsuit March 6. Leon said that even though they didn't receive the emails, the four board members were effectively terminated in February, and so they didn't have the authority to appoint Brehm to lead the board. An attorney for Brehm did not immediately respond to a request for comment. Another lawsuit over the dismantling of the agency is still pending before the same judge. In that case, two USADF staffers and a consulting firm based in Zambia that works closely with USADF contend that the Trump administration's efforts to deeply scale back the agency wrongly usurps Congress' powers. They also say Marocco was unlawfully appointed to the board, in part because he was never confirmed by the Senate as required. Leon's ruling in Brehm's case did not address whether the Trump administration had the power to install Marocco as board chair on a temporary basis.


Washington Post
16 minutes ago
- Washington Post
Trump-endorsed Jack Ciattarelli wins Republican primary for New Jersey governor
Jack Ciattarelli easily won the Republican nomination for New Jersey governor on Tuesday with President Donald Trump's endorsement, setting up a November general election expected to be an early national bellwether for voters' views in the first year of Trump's second term. Ciattarelli was projected the winner shortly after the polls closed, the Associated Press reported. The winner of the crowded Democratic primary was not immediately clear Tuesday night, with six candidates splitting the vote in the most expensive election in New Jersey history. Trump played a central role in the Democrats' contest, too, as the candidates vowed to fight the White House and questioned each others' anti-Trump credentials.