On Thursday, CNBC reporter Steve Liesman slammed Donald Trump’s administration for the way it calculated the so-called “Liberation Day” tariffs, calling it a “made-up” method and “extraordinary nonsense.”
Trump had claimed these tariffs were based on “reciprocal” rates—what other countries charge the U.S. for imports. However, the president didn’t explain how those rates were calculated, and when he revealed them in the Rose Garden, they raised serious questions. Financial journalist James Surowiecki quickly figured out that the White House had simply divided America’s trade deficit with a country by the exports that country sent to the U.S. Then, because Trump claimed he was being “kind,” the final tariff rates were halved.
Surowiecki pointed out that “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,” calling the approach “extraordinary nonsense.” He also noted that even countries where the U.S. had a trade deficit of less than 10% were still hit with a 10% tariff.
As U.S. stock markets opened to a massive decline, Liesman and CNBC hosts were alarmed at the damage caused by Trump’s global tariffs. “They’re burning down the house to cook a steak,” said Squawk on the Street said anchor Carl Quintanilla.
Liesman was brought in to break down how the Trump administration came up with their import tax rates, and he didn’t hold back in calling out the absurdity of the president’s approach. Reflecting on the confusion he felt during Trump’s Rose Garden speech, the senior economics reporter shared how he was bombarded with questions from economists and trade experts who were just as puzzled about where Trump’s numbers came from.
“I get off set, and I start getting emails from economists and international trade experts I know, and they’re like, ‘What the heck are those numbers? Nobody has any idea where those came from,’” Liesman said, adding that Surowiecki was the one to figure it out.
Liesman then quoted a White House official who tried to defend the method: “These tariffs are customized to each country, and the numbers have been calculated by the Council of Economic Advisers using well-established methodologies from international trade economic literature.”
But Liesman didn’t buy it. “I started calling international trade experts, and nobody’s ever heard of this formula. Nobody’s ever used this formula. So, it seems the president just made it up as he went along.”
Liesman explained that while people expected Trump’s tariffs to be “reciprocal,” they were actually “off the charts” and way higher than what other countries charge the U.S. This, he pointed out, could make the U.S. the “highest tariff country in at least the developed world,” which likely contributed to the massive market sell-off on Thursday.
Liesman wrapped up by saying, “You’ve heard all the downgrades. Not a single forecaster is predicting more U.S. growth, more employment, or lower inflation because of these tariffs. Every forecast is the opposite: lower growth, higher inflation, and fewer jobs.”
Watch the segment from CNBC below:
