Duties, Trump’s strange mathematics and because the US rates are not « mutual »
Because the narration of the American President has no economic foundation and there is no EU duty of 39% on American products
There is no reciprocity in the duties of Donald Trump and the American president has no reason to argue that the European Union has « exploited » the United States through commercial practices unfavorable for them or that the commercial deficit of the USA is necessarily the result of alleged barriers. With the help of the economist Antonio Villafranca, vice -president for the research of ISPI, we see why the narration of the 47th tenant of the White House has no economic foundation and the duties, in the absence of unfair practices, hurt both those who suffer them and those who impose them. Reason why Europe must weigh the counter-misures well.
1) As the Trump administration explained, the duties were calculated by dividing the commercial deficit of the United States towards a country for the total import from that country. What does it mean?
Let’s take the example of the European Union. In 2024 the US-EU commercial deficit was worth 235.6 billion dollars. This number is obtained making the difference between the assets that the United States imported from the EU, for a value of 605.8 billion dollars, and the goods that exported to the EU for 370.2 billion. These 235.6 billion have been divided by 605.8 billion dollars of US imports. The result is 0.39 or 39%, which divided two ago 19.5%, then rounded at 20%: the duty imposed on the EU.
2) On the basis of this calculation, Trump claims that the EU imposes 39% duties on the United States, but it is not so. What do real figures say?
The office of the representative for the United States trade, in a document published on March 31, claims that the average tariff rate applied by the European Union was 5% in 2023. A figure, therefore, very far from 39% of which the American president speaks. But that 5% is nothing more than the average of European rates on American goods. If weighted for the product sectors, the real rate is little above 1%, according to the estimates of the European Commission. And it is lower, even if slightly, to the weighted average rate of the American duties imposed on European goods.
3) Among the barriers that Trump contest in Brussels there are also standards and rules that, according to him, damage the USA. Is there really this imbalance?
The EU was given ambitious standards, both from an environmental and health point of view, which also requires import products. It does so to protect European consumers but also companies with the risk of undergoing unfair competition of more low -cost products but with lower standards. As regards the digital legislation, the most invised to the United States, the goal is to guarantee data management that protect citizens and a loyal competition between the platforms, avoiding monopoly situations.
4) Has this damaged big tech?
Net of the antitrust fines and the effort that American companies must make to adapt to European standards, the advantage of the USA on digital remains very strong. The numbers are clear: the EU has a deficit of 109 billion euros in the services. Many of whom are disbursed by the Big Tech giants, which make great profits in Europe.
5) What are the risks of the duties?
According to the first estimates, an American average family could cost $ 2,100 a year. And they will weigh on the Italian economy for more than half a percentage point in the three-year period 2025-2027, according to the Bank of Italy. Making an overall estimate of the relapses is difficult, because it cannot be taken into account only of the direct and bilateral impact of the rates. For example, as a side effect of the US-China commercial war, the EU is likely to be flooded with low-cost Chinese imports.
