Trump’s pricing mathematics are crazy, known as “wisdom of crowds” author – politico

This approach meant that Trump and his advisers simply took the American trade deficit with the European Union – 235.6 billion dollars in 2024 – and divided it by the block exports to the United States, which totaled $ 605.8 billion.

The result was 39%, which the administration interpreted as the “unfair” commercial advantage that the EU has on the United States from there, the White House offered a tariff of 20%, by framing it as a corrective measure to level the rules of the game.

Trump, speaking on Wednesday in the white house rose garden, said that he was “nice” by reducing the rate rate almost in two.

The White House responded with a formula featuring Greek letters and five research references to highlight the credibility of its capital economic decision. By the way, this formula describes the same detailed calculation by Surowiecki in his analysis.

Washington said that its reciprocal prices, organized by the Council of Economic Advisors, were based on a formula representing commercial barriers, import elasticities and rate passing rates – aimed at fixing sufficiently high prices to eliminate bilateral trade deficits. He also considered the value added tax as a commercial barrier – even if it is paid on the products and services sold in a country, regardless of where the sales of the company that sell them.

The calculated figure of the white house of 39% is more than 10 times greater than the real average, the price weighted by the trade charged by the EU of 2.7%, according to the World Trade Organization.

Surowiecki calculations, better known as the author of the successful book “The Wisdom of Crowds”, were a great subject of discussion in Europe on Thursday. Politicians and civil servants try to make an answer to Trump prices which, according to the president of the European Commission, Ursula von der Leyen, include a threat to fight back while remaining willing to negotiate.