Isn’t there one of his advisors brave enough to give him a simple lesson in the theory of balance of trade between trading countries?
‘The White House has now published its official methodology, and it turns out there is a simple equation behind it
The calculations are based on a country’s goods trade deficit with the US. In other words, how much more the US imports than it exports. This number is then divided by the total value of imports from that country.
Let’s use China as an example: The US buys more goods from China than it sells to them - there is a goods deficit of $295bn and the total amount of goods it buys from China is $440bn.
Then, we find the percentage difference between those two numbers, which = 67% - that’s the number which appears in the first column of Trump’s chart.
And to work out column two - the tariff the US wishes to impose - you simply divide that number by two.
So in China’s case, the result is 34, and there you have the tariff.’
Surely even Trump should understand that a small country that exports diamonds to the USA might not have a population rich enough to buy American cars or other expensive goods of an equal value.
‘ Lesotho says it will send a government delegation to the US to plead its case after Washington imposed its highest tariffs - 50% - on its imports.
The small southern African country’s Trade Minister, Mokhethi Shelile, has warned of factory closures and job losses.
The US has a large trade deficit with Lesotho, which sells textiles and diamonds to America.
Thousands of people in the country of 2.3 million people are employed making clothes for the US market under a tax-free initiative set up to help countries trade their way out of poverty.’
Tariff turmoil topples the US dollar - LARGE MOVEMENTS
Key movements:
GBPUSD at a 6-month high — up nearly 2% in 48 hours
GBPEUR down sharply, nearing 6-month lows
GBPAUD near a 5-year high
GBPNZD at a 9-year peak
Impact on property prices:
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