Economic think tank head slams Trump's 'simplistic, crude' tariffs

Taipei, April 3 (CNA) The head of one of Taiwan's leading economic think tanks on Thursday slammed the United States' method for calculating sweeping global tariffs, including a 32 percent tariff on Taiwanese goods, as "simplistic and crude."

In a Facebook post, Chung-Hua Institution for Economic Research (CIER) President Lien Hsien-ming (連賢明) said his organization had been working under the wrong assumption about the U.S. tariffs.

The CIER, along with Taiwan's finance minister, believed that because of the complexity of calculating tariffs and the short time frame for doing so, the U.S. would opt for a uniform tariff on all countries, Lien said.

"As it turned out," he said, "they had a unique way of calculating the reciprocal tariffs."

According to Lien, Taiwan's tariff rate was calculated by dividing the countries' 2024 trade deficit (US$73.9 billion) by the total cost of goods the U.S. imported from Taiwan (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, Lien said, calling the method "simplistic and crude."

Lien noted that in 2024, the trade deficit between the U.S. and Taiwan jumped from US$47.8 billion to US$73.9 billion, due to an increase in U.S. imports.

If the U.S. had used 2023 trade figures, and divided the trade deficit that year of US$47.8 billion by the total cost of goods the U.S. imported from Taiwan (US$87.7 billion), equaling 58 percent, the tariff would have been 29 percent, Lien said.

Tariff details

At a Rose Garden event Wednesday, Trump announced a baseline 10 percent tax on imports from all countries, taking effect April 5.

Countries with larger trade surpluses with the U.S. will also face higher duties beginning April 9, including Taiwan (32 percent), China (34 percent), Japan (24 percent), South Korea (26 percent), Vietnam (46 percent) and Thailand (37 percent).

Crucially, semiconductors, one of Taiwan's top exports, as well as other products, including copper, pharmaceuticals and lumber articles, are not covered by the new tariff regime.

Taiwan's government on Thursday described the tariffs as "unreasonable" and "highly regrettable," and said it would lodge "a solemn representation" with the U.S. Trade Representative and continue negotiations with the U.S. to protect its interests.