The foreign minister told Reuters last month that countries with one of the highest HIV/AIDS infection rates in the world were already feeling the impact of aid cuts as their health sector relied on them.
“The biggest losers are Africa and Southeast Asia,” Denton said, adding that “there is a risk of further damage to the development outlook of countries facing worsening trade.”
However, this formula wings chaos amongst the rich countries. In the European Union, the World Trade Organization has generated punitive tariffs of 20%, four times the 5% calculated as the EU’s average tariff rate.
“So, at least for us, that’s a huge inaccuracy,” said Stefano Berni, general manager of the consortium representing the Italian manufacturers of Grana Padano’s specialty cheese.
“It costs three times more today to enter the United States today.
Asked about the methodology, Kush Desai of the White House Deputy Press Bureau posted to X, “We literally calculated the tariff and non-tariff barriers,” including a screenshot of a White House paper setting algebra behind the formula.
Asked how the Trump administration came up with the formula, Commerce Secretary Howard Lutnick didn’t explain it directly, but said the US Trade Representative Economist had worked for many years on metrics that reflected all trade barriers set by a particular country.
But economists around the world were rushing to point out that the term cancelled each other so that it could be returned to simple quotients of the commodity trade deficit via trade and export of goods.
“There’s really no methodology there,” said Mary Lovely, a senior fellow at the Peterson Institute. “Finding yourself with cancer and finding medication is like being based on dividing your weight by age. The word “mutual” is deeply misleading. ”
Robert Kahn, managing director of Global Macro for Eurasia Group Consultancy, agreed to have created “a lot of this kind of nonsense figure that is not important.”
“It signals… we’re pulling back from our relationships and alliances with them, and the cold showers of many of our traditional allies,” he told Reuters.
Others also raised questions about the widely held view that Trump is launching an opening gambit on a one-on-one discussion with individual countries that will eventually see new US tariffs drop sharply.
“The US chose a mechanical methodology inherently,” says Stephen Adams, a former European trade advisor who currently works at Global Counsel Consulting.
“One of the practical questions it raises is whether there is scope to negotiate this… The US has not identified any specific measures that could be changed to convince the president to change his mind.”