Donald Trump returned to the White House for a second term on January 20, 2025. He assumed the presidency with a pledge to remake the world order so that America would once again emerge as the dominant global power. He declared that he needed to act as a dictator for just one day - during which he would issue dozens of executive orders that, in his view, would bypass congressional approval. And he kept his word.

The first set of orders imposed tariffs on imports entering the country. The second wave targeted immigrants, including those who had arrived legally. The proposed tariffs were based on a formula that linked punitive taxes to the United States' bilateral trade deficits in goods with individual countries — in other words, the extent to which the US imported more from those countries than it exported to them.

The calculation involved determining the ratio between the US trade deficit with a country and that country's total exports to the US. This ratio was then halved to produce what the administration termed a "discounted reciprocal tariff."

Economists were critical of the assumption behind the calculation for a number of reasons. They noted that the formula excluded services — which constitute the majority of the US economy and a significant portion of its exports — from the trade deficit calculations. This omission, they argued, rendered America's trade relationships with its partners inaccurately one-sided. The Trump Administration "has an indefensible foundation to an indefensible policy," said Douglas Holtz-Eakin, the President of the Conservative American........

© The Express Tribune