April 3, 2025
Kevin Duffy wrote:
Hi Lew,
How are these “reciprocal tariffs” being calculated?
By country: “Tariffs Charged to U.S.A.” = trade deficit / imports.
According to the Office of the U.S. Trade Representative, “This calculation assumes that persistent trade deficits are due to a combination of tariff and non-tariff factors that prevent trade from balancing.”
What if they’re not? What if other factors might be involved:
– Low savings
– High government borrowing
– Direct foreign investment
– Indirect foreign investment (stocks)
– Willingness of foreign central banks to hold U.S. dollars as reserve currency
The economic illiteracy, hubris and recklessness of the people behind these decisions (Trump, Vance, Lutnick, Bessent and Miran) is truly staggering.
