Trump's global tariffs spark economic uncertainty
10 per cent tariffs on almost all goods from nearly all countries worldwide, imposed by the USA, have become a reality. However, as reported by the media, both the method of calculating the new tariffs and the selection of certain countries or regions are raising doubts among experts.
Donald Trump announced on Wednesday, during "Liberation Day," retaliatory tariffs on the entire world: 10 per cent on all imports and 25 per cent on foreign cars. He presented a list of countries and the tariff rates that will apply to them.
New U.S. tariffs. Doubts arise
The basic 10 per cent tariffs on products from all countries came into effect on April 5, and additional tariffs on goods from specific countries on April 9.
However, as reported by the media, both the method of calculating the new tariffs and the selection of certain countries or regions are raising doubts among experts.
On the list of affected countries are, for example, Australia's Heard and McDonald Islands, which are inhabited only by seals, penguins, and birds. The Falklands, inhabited by 3,200 people and about a million penguins, have been hit with 41 per cent tariffs on exports to the USA.
"Internet analysts have taken note of the similarities between the Trump administration's formula used to decide the 'Liberation Day' tariffs, and the same methods provided by ChatGPT if asked. Critics highlighted that ChatGPT and other artificial intelligence chatbots would provide very similar methods for setting tariff levels if they were asked to design a policy," reported the American "Newsweek."
"I think they asked ChatGPT to calculate the tariffs from other countries, which is why the tariffs make absolutely no sense," "Newsweek" cites a post from political commentator Steve Bonnell on platform X.
Economist James Surowiecki suggested that the tariffs might be the result of a simplified calculation resembling recommendations from popular AI chatbots. According to him, the formula involves dividing a country's trade deficit with the USA by its total exports to the USA. The White House has denied these claims.
New U.S. tariffs
On April 9, additional taxes on goods from 57 countries with a trade surplus with the United States are set to be implemented.
Among them are China and the European Union, which will be subject to additional tariffs of 34 per cent and 20 per cent, respectively, as well as Japan (24 per cent), South Korea (25 per cent), India (26 per cent), Vietnam (46 per cent), and Taiwan (32 per cent).
According to calculations by Yale Budget Lab, if all the new tariffs go into effect as announced by President Trump, the new average U.S. tariff rate will rise from 2.2 to over 22 per cent, marking the highest level in over a century, and also significantly higher than tariffs in most countries around the world. As a result, tariffs will surpass those introduced by the Smoot-Hawley Act of 1930 in response to the Great Depression. Those tariffs are considered by historians to be one of the factors prolonging the global crisis.
Trump's tariffs: market reaction
The announcement of tariffs by U.S. President Donald Trump on all imports to the United States caused sharp declines in the stock markets. The world's wealthiest people also felt the impact.
In two days, as calculated by CNBC on Saturday, Elon Musk's companies collectively lost about $30.9 (CAD 44) billion in market value, Jeff Bezos' about $23.49 (CAD 33.4) billion, and Mark Zuckerberg's about $27.34 (CAD 38.9) billion. All of them, it should be noted, supported the Republican politician's campaign in various ways.
