Here’s How Trump Calculated His Tariffs—and It’s Ridiculous

The Trump administration seems to have destroyed global economies overnight while misunderstanding basic economics.

In the wake of Donald Trump’s tariff announcement Wednesday, former New Yorker financial writer James Surowiecki pointed out that a column on Trump’s tariff sheet labeled “tariffs charged to the U.S.A.” was likely founded on bad math.

“They didn’t actually calculate tariff rates + non-tariff barriers, as they say they did. Instead, for every country, they just took our trade deficit with that country and divided it by the country’s exports to us,” Surowiecki argued. “So we have a $17.9 billion trade deficit with Indonesia. Its exports to us are $28 billion. $17.9/$28 = 64 percent, which Trump claims is the tariff rate Indonesia charges us.”

“What extraordinary nonsense this is,” he added.

That would mean that the Trump administration imposed earth-shattering tariff hikes on the rest of the world without looking at the whole picture. Mainly, that the administration calculated the tariffs charged by other countries by only looking at goods provided, rather than the combined value of goods and services—something that “most economists seem to think is an odd way to calculate tariffs,” according to BBC Verify’s Shayan Sardarizadeh.

The White House initially refuted the tariff theory. White House Deputy Press Secretary Kush Desai posted on X that “we literally calculated tariff and non tariff barriers.” But in an attempt to prove his point, Desai grabbed a formula from the US Treasury website that actually proved Surowiecki’s.

Sardarizadeh broke it down. “∆τᵢ = (x-m) / (ε x φ x m),” he shared. “The formula includes ‘x’ for exports and ‘m’ for imports.”

“But it also has ‘ε’ for ‘price elasticity of import demand’, set at 4 by the Treasury; multiplied by ‘φ’ for ‘elasticity of import prices’, set at 0.25 by the Treasury, which means they basically cancel out each other as 4 x 0.25 = 1,” Sardarizadeh continued. “So, in effect, all you’re left with in the formula is exports - imports / imports, which is what X users and journalists had accurately pointed out all along.”

But the administration’s bad math only matters so much to the tariff-heavy agenda. Even in countries where the trade deficit was less than 10 percent, or even in countries where there was a surplus, Trump still tacked on a 10 percent tariff.

Donald Trump announced a range of tariffs on nearly every country in the world—including, inexplicably, some practically uninhabited islands, one of which is home to a U.S. military base.

The British Indian Ocean Territory, a small cluster of islands in the South Indian Ocean, was hit with 10 percent tariffs on U.S. imports from the Trump administration Wednesday as part of its Liberation Day announcement.

The islands are mostly uninhabited, save for approximately 3,000 U.S. and U.K. military personnel who are stationed at a joint Navy Support Facility on the island Diego Garcia. Trump’s tariffs would mostly affect the service members there. Another roughly 1,200 people live on the country’s Chagos Archipelago.

As one might expect from the name, the territory is owned by the United Kingdom, which Trump hit with a 10 percent tariff, relatively low compared to other countries.

Trump also announced 10 percent tariffs on the Heard Island and McDonald Islands, an uninhabited Australian territory that was listed as a Unesco World Heritage site for its “complete absence of alien plants and animals, as well as human impact.” Australia was saddled with a 10 percent tariff, as well.

It’s unclear whether the tariffs on these territories would compound to 20 percent. Crucially, it’s unclear that anyone thought about this at all.

Online, some speculated that the tariffs were doled out according to internet domains, and that because the Heart Island and McDonald Islands use a different domain (.hm) than Australia, (.au) they were considered different countries. That seemed to be the only explanation for levying a tariff on a territory that has no economy to speak of.

Donald Trump claimed Wednesday that the United States entered the Great Depression as a result of turning its back on the policy of placing tariffs on other countries in favor of an income tax.

During a winding speech to mark the so-called Liberation Day, Trump presented an alternative history where steep tariffs, like the ones he’d come to celebrate, could have prevented the worldwide economic disintegration of the early twentieth century.

“From 1789 to 1913 we were a tariff-backed nation, and the United States was proportionately the wealthiest it has ever been,” Trump said, adding that the U.S. was “collecting so much money, so fast, we didn’t know what to do with it!

“Then, in 1913 for reasons unknown to mankind, they established the income tax so citizens, rather than foreign countries, would start paying the money necessary to run our government,” he said.

“Then in 1928 it all came to a very abrupt end with the Great Depression, and it would have never happened if they had stayed with the tariff policy; it would have been a much different story,” Trump said. “They tried to bring back tariffs to save our country, but it was gone. It was gone. It was too late, nothing could have been done.”

Trump’s revisionist history is designed to promote his economic agenda—not reflect what actually happened. Not only could tariffs not have prevented the Great Depression, they made it even worse.

In 1913, as the result of struggling farmers and Democrats advocating to establish an income tax, Republicans put up an income tax amendment, hoping that it would be rejected—it wasn’t, and the Sixteenth Amendment became law.

At the same time, Congress passed the Underwood Simmons Tariff Act that lowered tariff rates from 40 percent to 27 percent, in a Democrat-backed effort to promote free trade. Crucially, tariffs were raised again in 1921, after Republican President Warren Harding entered the White House and began a reinvigorated era of protectionism.

In 1930, Congress passed the Smoot-Hawley Tariff Act, which raised tariffs in all sectors and is considered to have exacerbated the worldwide economic downturn that lasted from 1929 until 1939, by undermining international trade and affording little protection to domestic producers.

Smoot-Hawley was disastrous not only for the U.S. economy, tanking U.S. exports to Europe from $2,341 million in 1929 to just $784 million in 1932, but also for global trade, which declined by a whopping 66 percent between 1929 and 1934, according to  the U.S. Office of the Historian. The effects of Smoot-Hawley were so awful that it marked the end of steep tariffs in American trade policy for the rest of the twentieth century.

Trump’s baseless insistence that lowered tariffs led to the Great Depression is representative of his entire economic policy, and just how untethered from reality it has become.

President Trump pulled out a chart to help illustrate his aggressive, country-specific tariff plans during his “Liberation Day” speech on Wednesday.

“We’re gonna be charging a discounted reciprocal tariff of 34 percent [on China],” Trump said, holding up the large black, blue, and yellow chart that Commerce Secretary Howard Lutnick dutifully brought to him onstage. “In other words, they charge us, we charge them. We charge them less, so how can anybody be upset? They will be, because we never charge anybody anything. But now we’re gonna charge.”

Trump confirmed there will be 25 percent tariffs on all car imports, in addition to the specific tariffs he plans to levy against each of our trading partners on the grounds that they’ve been “ripping us off.”

The chart notes plans for tariffs on a list of countries including:

• 34 percent tariffs on China
• 20 percent tariffs on the European Union
• 49 percent tariffs on Cambodia
• 37 percent tariffs on Bangladesh
• 44 percent tariffs on Sri Lanka
• 46 percent tariffs on Vietnam

The tariffs will affect more than 100 U.S. trading partners, but Canada and Mexico are conspicuously left off the list. Many of the targeted countries are some of the poorest in the world.

“We’re going to build our future with American hands, with American heart, with American steel, and we’re gonna build it with American pride like we used to,” Trump said later in his speech.

These tariffs—intended to revitalize domestic manufacturing—have shocked the market and will likely make multiple goods much more expensive for those American manufacturers, and for consumers.

This story has been updated.

Yet another law firm has come to an agreement with Donald Trump’s administration, after the president began targeting major law firms that hired lawyers he didn’t like or took up cases and clients he claimed went against his agenda.

Trump shared a statement on Truth Social Wednesday announcing that Milbank LPP agreed to perform $100 million worth of pro bono legal services on “initiatives supported by the president and Milbank,” including partners of “diverse political ideologies,” and representing the “full political spectrum, including Conservative ideals.

“Milbank shall not deny representation on the basis of the political affiliation of the prospective client, or because of opposition to any government official,” read the statement.

Similarly to the other firms that have struck a deal with the Trump administration, Milbank agreed not to engage in DEI hiring practices, in accordance with Trump’s executive order barring the supposedly discriminatory programs.

The deal comes as the Trump administration has targeted several other major law firms, alleging that they’d committed wrongdoing by defending clients in cases about racial discrimination, elections, and immigration. Trump threatened to have their security clearances revoked and government contracts terminated unless they complied with his demands.

Crucially, Milbank wasn’t targeted by the Trump administration but had “approached” the government stating its “resolve to help end the Weaponization of the Justice System and the Legal Profession,” according to the statement. Last week, Skadden, Arps, Slate, Meagher & Flom also preemptively agreed to bend the knee to Trump. Even though they hadn’t been the direct target of Trump’s vendetta, these law firms demonstrate the chilling effect of Trump’s executive orders.

Willkie Farr & Gallagher, another major law firm, which happens to employ Doug Emhoff, announced a similar deal earlier Wednesday, leading to calls for the former second gentleman to resign.

Two other major firms, WilmerHale and Jenner & Block, challenged the Trump administration’s threat to revoke their security clearances as an unprecedented attack on the Sixth Amendment and a blatant attempt to chill the legal profession from taking up cases that aren’t aligned with his political agenda. Another law firm, Perkins Coie, which was targeted for representing Hillary Clinton’s 2016 presidential campaign, challenged a similar order last month and was granted a temporary injunction against the Trump administration’s threat to revoke clearances and access.

Last month, Paul, Weiss, Rifkind, Wharton & Garrison caved to the administration and offered $40 million in free legal services, revoked its own DEI practices, and sold one of its own lawyers down the river, simply because he’d once investigated Trump for alleged financial crimes. Last month, Trump also targeted the firm Covington & Burling, suspending the security clearances of lawyers who had worked with former special prosecutor Jack Smith.

Signalgate seems to have been the norm for national security adviser Mike Waltz, rather than the exception.

Waltz’s team had set up at least 20 Signal group chats dedicated to discussing international crises, Politico reported Wednesday. His staff “regularly” leaned on the retail app to coordinate work on issues in Ukraine, China, Gaza, the Middle East, Africa, and Europe, according to four people who had been added to the chats.

All four sources that spoke with the publication said they witnessed instances of “sensitive information” being discussed, reported Politico’s White House bureau chief Dasha Burns.

Waltz’s emerging national security scandals have made him less than popular in the White House. Last month, Waltz made Donald Trump furious by accidentally inviting a journalist to a Cabinet group chat on Signal about bombing Yemen.

In the days after the initial scandal broke, Wired reported that an account sharing the intelligence official’s name had seemingly left his Venmo profile public. In doing so, Waltz disclosed the names of hundreds of his personal and professional associates, including government officials and lobbyists.

Last week, the German newspaper Der Spiegel reported that Waltz was among several senior administration officials who had their personal data, such as account passwords, email addresses, and personal cell phone numbers, listed online.

If that weren’t bad enough, The Washington Post reported Tuesday that Waltz and his team had been relying on Gmail—a platform even less secure than Signal—to discuss “sensitive military positions and powerful weapons systems relating to an ongoing conflict.”

A Harvard CAPS/Harris poll released Sunday suggested that 60 percent of polled Americans felt that the administration’s decision to use Signal to conduct highly sensitive government business was “wrong”—that included 73 percent of Democrats, 65 percent of independents, and 43 percent of Republicans.

A YouGov survey published last week found that 53 percent of nearly 6,000 polled Americans felt that the Trump administration’s Signal leak was “very serious,” while another 21 percent described it as “somewhat serious.”

It remains to be seen how Americans will feel about the other 19 Signal chats.

Donald Trump’s mass deportation efforts, which have skirted numerous laws and denied due process to immigrants, are very unpopular with the American people. 

A new poll from YouGov states that 60 percent of respondents oppose deporting immigrants without criminal convictions to El Salvador without them having a chance to challenge their deportation in court, and 46 percent strongly oppose it. But the opposition to Trump’s El Salvador plan breaks down on party lines: 89 percent of Democrats and 62 percent of independents oppose it, while just 34 percent of Republicans do. 

The plan has been rebuked in federal court and resulted in restraining orders against the Trump administration, which is trying to ignore them by invoking the Alien Enemies Act. In one case, a person with no criminal record, Venezuelan national Kilmer Armado Abrego Garcia, was deported to El Salvador due to an administrative error, and press secretary Karoline Leavitt continued to insist he was a hardened gang member with no evidence. Administration officials are even reluctant to fix their mistake.  

The Trump administration has bragged about deporting dangerous members of violent gangs such as MS-13 and Tren de Aragua, but in reality has based those allegations on weak evidence, such as tattoos. Homeland Security Secretary Kristi Noem even used El Salvador’s Centro de Confinamiento del Terrorismo prison as a sick backdrop for a propaganda video that she posted on social media. 

Not content with one illegal deportation plan, Trump wants to start deporting immigrants to other countries, discussing plans with Benin, Eswatini, Kosovo, Libya, Moldova, Mongolia, and Rwanda. But given how unpopular deporting immigrants to El Salvador is, sending migrants to other legal black holes is not likely to gain the president any supporters and will likely hurt his poll numbers further. With recent elections not going his way, the sensible thing for Trump to do would be to slow down, but he’s not known for doing that.

White House press secretary Karoline Leavitt thinks that reports of Elon Musk’s potential leave of absence from the Trump administration are “garbage.”

A story Wednesday from Politico’s Rachael Bade posits that Trump has communicated to his inner circle that although he isn’t displeased with Musk’s performance as the federal government’s malevolent auditor, the two men mutually decided that it was time for Musk to “return to his businesses and take on a supporting role,” according to three anonymous insiders.

Some speculate that Musk’s current business failings are the cause for the shift. Others note that it might be intended to preempt any future liability Musk and his strangeness may pose to the administration. Either way, Leavitt swears that none of it is true.

“This ‘scoop’ is garbage,” Leavitt wrote on X about an hour after Bade’s story broke. “Elon Musk and President Trump have both *publicly* stated that Elon will depart from public service as a special government employee when his incredible work at DOGE is complete.”

There are no further details on the timeline of Musk’s departure, what exactly Musk’s “supporting role” would be, or how it’s any different from what he’s doing now.

The Trump administration is currently in talks with several countries to find a new place to deport immigrants, The Wall Street Journal reported.

Officials are seeking countries willing to accept deportees whose native countries are slow to take them back. The countries currently in talks with U.S. immigration officials are reportedly Benin, Eswatini, Kosovo, Libya, Moldova, Mongolia, and Rwanda, the Journal reported Tuesday night.

Ricardo Zuniga, a former senior State Department and National Security Council official, told the Journal that most countries willing to go along with U.S. demands would likely be “problematic.”

“But even they are asking, ‘What’s in it for us? Who’s going to pay for it? How am I going to explain the political burden of accepting people on behalf of the United States?’” Zuniga said.

Talks are currently being spearheaded by White House deputy chief of staff Stephen Miller, the architect behind Trump’s inhumane plan for massive deportations and known for his emotionally volatile run-ins with the press.

“Friendly reminder: If you illegally invaded our country the only ‘process’ you are entitled to is deportation,” Miller wrote on X Tuesday, advocating for the Trump administration to suspend due process to expedite the removal of alleged members of gangs the administration deems terrorist groups, as it did last month with the sudden removal of 261 alleged members of Tren de Aragua to El Salvador.

Deals with other countries may have been in the works for some time. U.S. conservatives began plotting to send deportees to Rwanda before Trump was even elected, copying a contentious plan from the U.K.’s conservative leadership to offload asylum-seekers there. The U.K.’s Rwanda plan, which has been in motion since 2022, has proved both inefficient and expensive, according to The Guardian.

Additionally, the U.S. government has previously raised concerns about human rights conditions in Rwanda, including reports of extrajudicial killings, arbitrary arrest and detainment, disappearances, and torture. The State Department reported similar conditions in Benin and Libya.

While these plans may have already been in the works, there may be a renewed sense of urgency after a judge’s decision barring the Trump administration from deporting people to El Salvador without first giving them an opportunity to challenge their removal.

Last week, U.S. District Court Judge Brian Murphy issued a temporary restraining order requiring the government to provide written notice and an opportunity for detainees to apply for protection before deporting them to a third country.

The order was a clear rebuke of Trump’s $6 million deal with Salvadoran President Nayib Bukele to accept deportees at the Latin American country’s Centro de Confinamiento del Terrorismo, or CECOT, a prison notorious for human rights abuses.

This wasn’t the first time that a judge challenged El Salvador as a destination for deportees. In a filing late last month, Judge James Boasberg said that by sending the prisoners to CECOT, the Trump administration had likely violated the Foreign Affairs Reform and Restructuring Act of 1998, which states that “it shall be the policy of the United States not to expel … any person to a country in which there are substantial grounds for believing the person would be in danger of being subjected to torture.”

The government admitted Monday that it had wrongly deported one Salvadoran national to El Salvador as a result of an “administrative error.” ICE was aware that a judge had previously ruled that the man could not be removed there for concerns that he’d be targeted by gang violence, but his name was mistakenly included as an alternate on a manifest for removal. A judge ruled that there would be no way to rescue the man from CECOT, as he was no longer in U.S. custody.

Despite dubbing himself the “Father of IVF,” Donald Trump actually won’t be funding federal infertility research.

The administration fired a team of researchers focused on infertility research and assisted reproductive technology Tuesday afternoon, the latest group to lose their jobs in sweeping new cuts at the Centers for Disease Control and Prevention.

“It is vital that the CDC, our nation’s public health agency, employs doctors and scientists who understand infertility, a disease that impacts one in six people worldwide,” Barbara Collura, president and CEO of the national infertility group RESOLVE, said in a statement. “Following today’s layoffs at the CDC, there will be no experts on infertility who will be able to inform public policy, brief members of Congress, publish articles and reports, and advance public awareness on the causes and treatments for infertility.”

The team was responsible for tracking in vitro fertilization cycles and creating and maintaining infertility-related databases. Speaking with HuffPost’s Alanna Vagianos, Collura said that questions remain regarding the future of that data—if it will be updated, and who would be doing the updating.

“That’s a lot of information and knowledge that walked out the door today,” Collura said.

The cut comes barely a week after Trump referred to himself as the “fertilization president” during a Women’s History Month event. Trump bragged about his purported efforts to expand IVF access and promised that there would be “tremendous goodies in the bag for women,” including “the fertilization and all the other things we’re talking about.”

So far, the Trump administration—directed by Elon Musk’s Department of Government Efficiency—has fired more than 100,000 federal employees. But tens of thousands more government jobs are expected to be on the chopping block as Trump pursues a second round of “voluntary” buyouts.

More than 10,000 jobs are expected to be cut at the Department of Health and Human Services, which encompasses the CDC. HHS Secretary Robert F. Kennedy Jr. has proposed downsizing the agency’s 82,000-person workforce by nearly a quarter. Other shuttered departments were responsible for research and policy recommendations on older adults, disabilities, HIV, minority health, mine safety, and smoking.