Number Theory: US-Vietnam circuit trade and tariff trouble
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Stock markets and economic analysts across the world are having a meltdown in the aftermath of Donald Trump slapping tariffs on the entire world. The tariffs announced by Trump are designed to “reciprocate” to the extent of the US’s trade deficit with individual countries rather than the tariffs they impose on US. Trump, at least as of now, has ruled out a roll-back and is in fact suggesting that it is US’s trading partners which will now have to offer better “deals” to the US.
The problem with Trump’s calculations, even if they turned out to be true in terms of trading partners bringing down their tariffs, is that they are too simplistic in a world of extremely complicated economic connections, and therefore unlikely to achieve the desired results of bringing the US trade deficit down. US trade with Vietnam, which has been slapped with one of the highest tariffs, in just one commodity is a good example.
