President Trump on Wednesday announced a minimum 10% tariff for all U.S. trading partners. To calculate the tariffs, the White House used a formula that focused on trade deficits and total exports.
Category
🤖
TechTranscript
00:00President Donald Trump's new tariffs have sparked a massive stock market sell-off.
00:04In one day, the S&P 500 dropped 4.8%, the Dow dipped 3%, and the Nasdaq Composite sank 6%.
00:11Trump announced sweeping additional tariffs Wednesday, ranging from a 10% blanket tariff
00:16to 50% on all trading partners that will take effect as early as April 5th.
00:21Canada and Mexico were exempt from the additional measures,
00:24but existing tariffs will still apply.
00:27Trump argues that these reciprocal tariffs will stop other countries
00:30from ripping off the United States.
00:32The administration said they used this formula to determine the tariff rate
00:37necessary to balance bilateral trade deficits between the U.S. and each of its trading partners.
00:42So, the trade deficit, divided by exports to the U.S. from that country, divided by 2.
00:47If the country has a trade surplus with the U.S. or the calculated tariff was less than 10%,
00:52the 10% flat rate was applied.
00:54The formula has attracted criticism for ignoring nuance,
00:57and some of the poorest countries on the list are hit the hardest,
01:00with 50% on Lesotho, 48% on Laos, and 47% on Madagascar.
01:06The tariffs will remain until Trump determines that the threat posed by the trade deficit
01:11and underlying non-reciprocal treatment is satisfied, resolved, or mitigated.