\nThe following is my understanding of the situation.<\/p>\n
\nThe Trump administration seems seldom short of ideas, whatever one might think of any particular one. An example is the calculation something like t=(x-m)\/(εφm).<\/p>\n
\nFrom what I’ve been able to piece together, in the calculation t=(x-m)\/(εφm), t is not of the reciprocal tariffs, but instead of theoretical (or one might say modeled) tariffs that are supposedly affecting US exports. The parameter x is the value of US exports to that country, and m the value of US imports from that country.<\/p>\n
\nε and φ are a little more interesting, especially taken together. They’ve been set so that their product is -1; hence, the formula is effectively t=(x-m)\/-m.<\/p>\n
\nIn the case of the European Union, this would mean t=((370-606)\/-606) = 39%, which is the figure that seems to have been reported. In the case of Vietnam, it would mean t=((13.1-136.6)\/-136.6) = 90%, which, again, seems to be the reported figure.<\/p>\n
\nThe reasoning behind the formula seems to be that if the US runs a trade deficit with a given country, it’s because of an effective tariff, defined or otherwise, charged on US exports to that country.<\/p>\n
\nThe proposed reciprocal tariff from the US seems to be, in most cases, about half of the effective tariff suggested by the calculation above.\n<\/p>\n
\nI hope to discuss ε and φ in a future post.<\/p>\n
\nSource:<\/p>\n
ustr.gov<\/a><\/p>\n bbc.com<\/a><\/p>\nJack of Oracle Tutoring by Jack and Diane,<\/a> Campbell River, BC. \n","protected":false},"excerpt":{"rendered":" Self-tutoring about theoretical tariff calculations and assumptions: the tutor mentions a formula. The following is my …<\/p>\n