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A Scatter Gun Approach

The Trump tariff shock is going to take a bit of time to sink in, though stock markets worldwide have already sunk. Altogether, 60 countries have been slapped with at least 10 percent tariffs; those with large trade surpluses with the US will pay a much higher rate. Trump’s public argument was two-fold: force US trade partners with the highest surpluses to lower their tariffs on US imports, and encourage US and other multinational firms to move their manufacturing to the US.

Interestingly, the tariff announcement did not apply to Russia, North Korea, Cuba, and Belarus, supposedly because they don’t run a trade surplus with the US. Except that Russia does.

On the other hand, Japan, South Korea, Taiwan, Israel, Ukraine, and just about every other country, whether friend or foe, was not spared, with tariff rates ranging from 24 to 40 percent. Even Britain, whose prime minister had thought the invitation to Trump from the king for a visit would help put off a tariff increase, was not spared. Nor for that matter were several islands that are not countries and have no humans. Everyone must pay.

The formula used to determine the tariff rate makes little sense to experts. It supposedly was based on other countries’ tariffs on US goods, but in fact a Washington Post specialist determined that the White House used “a very simplistic formula: Our trade deficit with that country, divided by the country’s exports to us. That’s a measure of something, but it’s not, strictly speaking, about tariffs. It’s about a trade imbalance.”

The European Union countries and China so far are the only ones that have vowed........

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