Trump shakes the markets with declarations of tariffs on dozens of countries and contracts are shaken.
We are here to make sense of the mess.
What is happening here?
Buzz on social media after it became clear that the US is changing the rules of the game and breaking a globally agreed-upon equation.
The traditional method (the equation accepted until now)
Most countries in the world calculated the tariff amount on American products according to a simple formula:
The country's trade deficit with the US ÷ its exports to the US = tariff percentage
Example: Assume Japan exports products worth $100 billion to the US but Japan imports only $60 billion from the US.
The US trade deficit with Japan = $40 billion
Tariff calculation: $40 billion ÷ $100 billion = 40% tariff
The more a country has an export surplus compared to imports from the US, the more tariffs it imposes on American products.
There is also logic in this; if a country imports few goods from another country, it needs to balance the revenues from those imports.
In addition, this formula encourages imports - import more, pay less!
The new American method – "the opposite way around" The US is changing the rules and setting tariffs not according to the agreed calculation, but the opposite:
The more a country exports to the US than it imports from it, the more tariffs the US will collect from it!
The United States even "accommodates the countries" and gives them a "discount" - instead of 100% of the classic calculation, the US will impose only 50% of this ratio.
That is, if according to the old method Japan was supposed to impose a 40% tariff on American products, the US will collect only a 20% tariff from it.
The reason driving Trump is simple: Trump wants to profit from all directions - also to profit from tariffs - also to make countries lower tariffs - to increase US exports - also to encourage companies to produce in the United States to avoid being affected by tariffs.
The United States is the world's largest importer - it imports much more than it exports - so according to the accepted calculation method - the United States has been the biggest victim of global tariffs until today.
Trump's move causes international controversy Experts claim this "breaks" international trade rules Other countries follow a clear rule → which creates balance The US decided to act differently → and this could harm the global trade system.
Conclusion – a new "tariff war"
The United States is shaking the world with a completely new equation; this is not just a specific tariff here or there, this is a change of rules in the global game.
Many countries may react to the American move and impose higher tariffs on the US.
The risk? A decrease in international trade, harm to American businesses, and an increase in consumer prices.
Will the world accept the US's rule changes – or will it respond with countermeasures?
Today, countries' reactions are expected to be published, especially the European Union and China. We will continue to update.
The struggle over tariff levels begins!