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CNBC reporter Steve Liesman assailed Donald Trump on Thursday for the “made-up” way his administration calculated the “Liberation Day” tariffs, which the president claimed were reciprocal rates based on how much other nations were charging the United States.
While the president made little mention of the methodology behind the calculations, which he unveiled on a giant poster in the Rose Garden, financial journalist James Surowiecki quickly deduced that the White House merely took the trade deficit America has with a country and divided it by the exports the country has sent to the U.S. Also, because Trump said he was being “kind,” the final tariff rate was then cut in half.
“South Korea, with which we have a trade agreement, is not charging a 50% tariff on U.S. exports. Nor is the EU charging a 39% tariff,” Surowiecki noted, adding: “What extraordinary nonsense this is.” He also pointed out that wherever the United States had a trade deficit of less than 10 percent with a country, or even a surplus, a tariff rate of 10 percent was still imposed.
With the U.S. stock markets opening to an absolute bloodbath on Thursday morning, Liesman and the other hosts at the business news network were beside themselves over the damage already being caused by the president’s sweeping global tariffs.
“They’re burning down the house to cook a steak,” Squawk on the Street anchor Carl Quintanilla said at one point.
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“Calling these reciprocal is not really accurate,” David Faber added while Jim Cramer raged: “I cannot think of another president in my lifetime who could knock down the stock market simply by opening his mouth than Jimmy Carter. Eureka! I have found him!”
Meanwhile, Liesman was brought on to discuss how the administration came up with the numbers for their import tax rates, and he didn’t mince words over just how absurd the president’s approach was. Recounting his confusion over Trump’s Rose Garden presentation, the network’s senior economics reporter noted that he was soon inundated with questions over where Trump came up with his rates.
“I get off set, and I start getting emails from the economists and the international trade experts I know, and they’re like, what the heck are those numbers? And nobody really understood where those numbers came from,” Liesman stated before referencing Surowiecki cracking the code.
“Now let me show you a comment from the White House on where this came from,” Liesman declared. “White House official telling reporters yesterday, ‘I want to emphasize here that these tariffs are customized to each country, and the numbers have been calculated by the Council of Economic Advisers using very, very well-established methodologies from the international trade economic literature.’”
He continued: “So then I started calling international trade economic experts. And nobody ever heard of this formula. Nobody has ever used this formula. So I’m sorry, but the conclusion seems to be that the president kind of made this up as he went along. He made it up.”
Liesman went on to explain that while there had been anticipation that Trump’s tariffs would be “reciprocal,” they turned out to be “off the charts and nowhere near what other countries charge us.” He also pointed out that this makes the United States perhaps the “highest tariff country in at least the developed world,” resulting in the massive market sell-off on Thursday.
“You guys have been talking about all of the downgrades. I don’t have a single…forecaster saying because of these tariffs, we are forecasting more U.S. growth, more employment, and lower inflation,” he concluded. “Every, every forecaster is the opposite: Lower growth, higher inflation, less employment.”
