Trump Administration's Tariff Calculation Error Sparks Market Volatility

According to Odaily, scholars from the American Enterprise Institute (AEI) have identified a significant calculation error in the tariff policy recently announced by U.S. President Donald Trump's administration. The White House mistakenly used the retail price elasticity (0.25) instead of the correct import price elasticity (0.945) in their formula, resulting in an overestimation of tariff rates by approximately four times. If the correct value were applied, Cambodia's tariff rate would decrease from 49% to 13%, Vietnam's from 46% to 12.2%, and most countries would fall to the White House's minimum set rate of 10%. This error has led to substantial market fluctuations, with noticeable declines in stock markets across the United States, Asia, and Europe. Some AEI economists have accused the White House of deliberately manipulating the figures to achieve the high tariffs desired by President Trump. In response, the White House has defended its use of retail prices, arguing that the actual tariff rates should be higher.