The Childish Tariff Formula That Will Reshape the Global Economy

 

Opinion

The Childish Tariff Formula That Will Reshape the Global Economy

April 3, 2025

Binyamin Appelbaum

By Binyamin Appelbaum

https://www.nytimes.com/2025/04/03/opinion/trump-tariffs-formula-global-economy.html

Editorial Board member

 

President Trump says the rest of the world is cheating the United States. He says he’s charging tariffs on imports from other countries and the biggest tariffs will be on the worst cheaters.

 

Which country tops Trump’s cheating chart? Well, it turns out to be the tiny, landlocked southern African kingdom of Lesotho.

 

In 2023, Lesotho exported about $228 million worth of goods and services to the United States and imported just $7.33 million worth from the United States. To rectify this imbalance, which the Trump administration regards as an intolerable abuse of the American people, the president is imposing a 50 percent tax on future imports from Lesotho — the highest rate on any country.

 

It is a decision that illustrates the stupidity and cruelty of Trump’s new trade policy even by comparison with its stated purpose.

 

Lesotho is one of the poorest countries on Earth. Its 2.3 million citizens spend an average of only $3 on American goods and services each year not because they’re trying to cheat the United States but because they have very little money.

 

And what of the stuff that Americans buy from Lesotho? Diamonds top the list. We could improve our trade balance with Lesotho by purchasing fewer diamonds, but we can’t mine our own. There are no commercial diamond mines in this country.

 

Lesotho is an extreme example, of course. But it is a valuable one all the same. It underscores that the president is lying to the American people.

 

Trump said repeatedly on Wednesday that the tariffs are “reciprocal,” but that’s not true. The tariff rates announced by the Trump administration are not related to the tariff rates charged by other countries. They were calculated using a childish formula based on trade imbalances.

 

The White House later said imbalances are a measure of all the ways that other countries cheat the United States. But as Lesotho illustrates, imbalances are a bad measuring stick. Other countries engage in unfair trade practices. So do we. Instead of doing the work to identify and target those problems, the Trump administration has decided to carpet-bomb the global economy.

 

The president — with apologies to F. Scott Fitzgerald — is a careless person, smashing up things and creatures and leaving others, eventually, to clean up the mess that he has made.

 

Binyamin Appelbaum is the lead writer on economics and business for The Times editorial board. He is based in Washington. @BCAppelbaum • Facebook