“Mad,” “crazy” and “insane” are the words working overtime as commentators try to describe the tariffs that U.S. President Donald Trump imposed on what he called “Liberation Day,” April 2. Slapping a 25-percent tariff on automobiles and auto parts, along with a flat 10 percent tariff on most countries regardless of whether they run a trade surplus with the U.S., reflects a highly unconventional approach. Even more striking is the use of an arbitrary formula – calculating a country’s trade surplus divided by its total exports to produce an index of alleged trade unfairness, which is then “kindly” halved by Trump to determine the applicable tariff. Such measures raise serious questions about the logic and fairness behind U.S. trade policy.
