The « unprecedented » formula of Trump explained

Jón Bjarki Bentsson says « unprecedented » Formula Donald Trump’s US president, who was used to determine the tariff percentage of the world’s nations, get people to scratch their heads because it has nothing to do with general customs calculations.

He says it is a complete view that the policy is appropriate for the economy of nations.

The formula that was used is not so complex, but it is controversial.

In order to determine the customs percentage, Trump had the so -called US trade deficit with other nations, taking into account. In simple terms, he is about the fact that if more is exported by products from a particular nation to the United States than from the United States, this deficit is created.

Trump looked at this difference in imports and exports, calculating how much the trade deficit would be, based on total exports of nations to the United States. He then shared this difference with two.

Thus, he determined the customs percentage of the nations of the world.

The tariff floor, or the lowest possible toll that Trump introduced on Wednesday, was 10%. That customs duty was imposed on nations that import more of US products than they are moving to the United States.

More moved to Iceland than vice versa

Iceland falls into the 10% party simply for the reason that Iceland is exported to more US products than is being transferred to the United States. In other words, the balance of goods is negative towards the United States in Iceland.

If you take an example of US and European trade, the trade deficit is negative by 39% from the US formula. As a result, Donald Trump imposed a 20% duty on products imported from EU countries.

Have the formula on mockery and mockery

The world’s economists have been competing to have the formula into mockery and mockery, and according to Jón Bjarka Bentsson, the chief economist of Íslandsbanki, the Formula has nothing to do with general tariff calculations.

It seems that the world’s poorer countries have been given the highest tariffs on themselves and is not least sanctified because these countries can afford to import US products.

« If we take Vietnam as an example, this is not a high-tech country, but from there are foods, Nike shoes and components into devices. On the other hand, there is little import from the United States into Vietnam. For that reason, they got the sky-high toll because of this unprecedented formula, » says Jon.

Not seen anyone measure this remedy

Even Trump’s hardest supporters in the business world have criticized the tariff plans.

« When this comes to the buddy, people quickly get annoyed, » says Jón Bjarki.

But does he have a lawyer in some eloquent economists?

« No, I have not seen anyone recommend this remedy if the people who are close to him are left, some economic advisers. No doubt such views exist, but there are complete marginal examination in my profession, that such a hard customs policy is sensible, » says Jón Bjarki.