Trump administration's tariff calculation error, actual tax rate may be overestimated by four times

On April 8th, scholars from the American Enterprise Institute (AEI) discovered significant miscalculations in the tariff policies recently announced by the Trump administration. The White House mistakenly used retail price elasticity (0.25) instead of the expected import price elasticity (0.945) in the formula, resulting in an overestimation of the tariff rate by about four times. If the correct values are used, for example, Cambodia's 49% tariff rate will be reduced to 13%, Vietnam's 46% will be reduced to 12.2%, and most countries will even be reduced to the minimum tax rate of 10% set by the White House. This error has caused significant market volatility, with significant declines in stock markets in the United States, Asia, and Europe. AEI economists accuse this of deliberate manipulation by the White House to meet Trump's expectations for high tariffs. The White House argues that using retail prices is reasonable and states that the actual tariff rate should be higher.