Apr. 5th, 2025

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The Economist: Five crazy Trump tariffs you wouldn’t believe:

    DONALD TRUMP’S tariff announcement on April 2nd has drawn mockery for its spurious maths. Any bilateral trade deficit is treated as gross unfairness; the tariffs are set by taking the measure as a share of goods imported from each country, and halving it. But there are other oddities too, from the fact that the tariff rates appear to be calculated for places with an internet domain name to the fact that they are based on a single year of data. The starkest demonstration of the absurdity of the tariffs is to look at the bizarre outcomes they produce. Here is our list of the five craziest duties.
    Before April 2nd, Saint Pierre and Miquelon was perhaps best known as the last vestige of French territory in North America. Now it bears the dubious honour of being the recipient of the highest “Liberation Day” tariffs, of 50% (a position it shares with Lesotho). That is more than twice the rate applied to the European Union, and five times the rate on some other overseas French territories. In July, the only month in the past two years when the islands traded at all with America, they exported $3.4m in goods to Uncle Sam, while importing next to nothing. That was, in hindsight, a bad move.

    The volatility of trade flows affects Switzerland, too. The Trump administration appears to have used data for just one year, 2024, to capture imports and exports. At the end of the year Switzerland exported a larger than usual amount of gold to America, pushing up its trade surplus. That earned it a tariff of 32% on all of its goods. Had data for 2022 been used, its “reciprocal” rate would have been 19%.
    One of the reasons for Mr Trump’s obsession with tariffs is that he wants to boost domestic production instead. Botswana faces a tariff rate of 38%, because it runs a trade surplus with America that largely reflects its diamond exports. Diamond deposits are rare in America, and there are no existing commercial mines. Vanilla is similarly hard to replace. It is one of the main exports of Madagascar, which has been lumbered with a 47% tariff

    Some populations will take the news better than others. The inhabitants of the Heard Island and the McDonald Islands, for instance, will shrug off their tariff rate of 10%. Four kinds of penguins and 29 species of mammals live in the Australian territory—but no humans. The minuscule amount of trade recorded with America appears to reflect mislabelling or administrative error. Some speculate that the fact the islands feature on the White House’s list at all, instead of receiving the same rate as Australia, is because they have an internet domain name (.hm), which appears to be how officials picked their targets.

    Meanwhile, a lucky few got off scot-free. Belarus, Cuba, Russia and North Korea did not make it on to Mr Trump’s naughty list. The White House says that is because sanctions preclude “meaningful trade” with Russia. Yet these did not stop the country exporting $3bn in goods to America in 2024, according to the Office of the US Trade Representative—about six times as much as Botswana. Russia ran a trade surplus with America of $2.5bn last year. Had the calculation applied to it, the country would have faced a tariff of about 40%. 

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