For more information visit Skatteforsk - Centre for Tax Research.
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.
JEL: F13