The head of one of the nation’s leading economic think tanks yesterday slammed the US’ method for calculating sweeping global tariffs, including a 32 percent tariff on Taiwanese goods, as “simplistic and crude.”
Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) wrote on Facebook that his organization had been working under the wrong assumption about the US tariffs.
The institute, along with the Ministry of Finance, believed that because of the complexity of calculating tariffs and the short time frame for doing so, the US would opt for a uniform tariff on all countries, Lien said.
Photo: Hsu Tzu-ling, Taipei Times
“As it turned out, they had a unique way of calculating the reciprocal tariffs,” he said.
At a Rose Garden event on Wednesday, US President Donald Trump announced a baseline 10 percent tax on imports from all countries, taking effect tomorrow, while countries with larger trade surpluses with the US would face higher reciprocal duties beginning on Wednesday next week, he said, without disclosing a specific formula for the calculations.
Following Trump’s announcement, many on social media speculated that the White House had derived its tariff rates using a controversial method and questioned that the figures appeared to reflect the US trade deficit as a proportion of total imports from each country.
In Taiwan’s case, Lien said the tariff rate was calculated by dividing the US’ trade deficit with Taiwan last year, at US$73.9 billion, by the total cost of goods the US imported from Taiwan, at US$116.2 billion. This works out to 63.6 percent and was rounded up to 64 percent.
“Trump says he is merciful, and so Taiwan’s tariff is set at 32 percent,” or half of 64 percent, Lien said, calling the method “simplistic and crude.”
If the US had used 2023 trade figures, and divided the trade deficit that year of US$47.8 billion by the US$87.7 billion imports from Taiwan in the year, the figure would be 58 percent and the tariff rate would have been 29 percent, he said.
The government yesterday described the 32 percent tariffs on Taiwan as “unreasonable” and “highly regrettable,” and said it would lodge “a solemn representation” with the US Trade Representative and continue negotiations with the US to protect its interests.
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