Deriving the Trump Tariffs

Ronald B. Davies

No 202509, Working Papers from School of Economics, University College Dublin

Abstract: On April 2, 2025, President Donald Trump announced a wide-ranging set of “reciprocal tariffs” against many of its trading partners. The calculation of these tariffs have elicited a largely negative reaction in part due to the simple formula used to calculate them. In this note, I provide a model which, under the proper assumptions, does indeed result in the administration’s formula. I, however, leave it to the reader to judge whether these assumptions are reasonable.

Keywords: Tariffs; Global supply chains; Passthrough (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Pages: 5 pages
Date: 2025-04
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