Live Stock Market News: Nasdaq Composite Down 4.5% & Dow Drops 1,200 Points

Shortly after tariffs were announced last night we noted in our live blog covering the event they appeared to be based upon trade imbalanced more than actual tariff rates.

Today, the White House announced the formula they used. You can see it below:

While this calculation looks complicated, it does essentially boil down to (exports – imports) / imports.

The way these tariffs were calculated is adding to the market selloff today because they create tariff rates that are so high there’s no real way for other countries to negotiate.

For example, a country with a weighted 2% tariff on the United States might have a 24% tariff rate imposed on them by Trump’s reciprocal tariffs. Vietnam recently announced a sweeping reduction on US tariffs but was still targeted by 46% reciprocal tariffs.

This increases the probability these tariffs are less a negotiating tactic and something Trump sees as a revenue-generating tool that will remain in effect. Most economists consider tariffs effectively a tax, which would mean these tariffs represent the largest tax increase in recent American history.

As you can see, there are many ways to look at these tariffs, but there is no debating their rates are very high and would put the United States significantly ahead of any other developed country in terms of tariff rates.