Capital Economy, Business and Finance
Trump’s apparent technique for working out tariffs is back-of-the-napkin stuff: take the US trade deficit with the country, divide it by the country’s exports to the US, then halve it to be “kind”.
A former financial columnist for the New Yorker calls it “extraordinary nonsense”.
The equation has led to sky-high tariffs on southeast Asian countries such as Cambodia (49 per cent), Laos (48) and Vietnam (46), which are too poor to be heavy importers from the US but are manufacturing hubs for American goods.
Nike, for instance, produces half of its footwear in Vietnam where it is thought to employ hundreds of thousands of people.
Another absurdity: the US applied a 10 per cent baseline for countries without large trade deficits.
This tariff rate has hit a small collection of Antarctic islands, inhabited by four species of penguins, some seabirds and no humans.
The Heard Island and McDonald Islands, naturally, had zero trade with the US last year.
