Trump's Tariff Calculation Is 'Sixth Grade Maths', Says Marko Papic

Macro and geopolitical expert Marko Papic from BCA Research sharply criticised the methodology behind US President Donald Trump's recent tariff calculations. Not only is the algorithm to calculate this tariff "6th grade maths", it appears they took each country's trade deficit with the US and "simply divided it with the exports to the US", he told NDTV Profit.

The new tariffs, which include a 27% levy on Indian goods, have raised concerns about their potential impact on global trade.

Trump's tariffs are part of a broader strategy to address trade imbalances. But experts like Papic warn that such high tariffs could lead to countries walking away from negotiations, posing a significant risk to international trade relations.

He also predicted political repercussions from the tariff imposition. "President Trump must recognise that approval ratings will fall to the mid-30s within weeks. There will be constraints on many Republicans, which will impact the numbers in the US Congress," he noted.

Such high tariffs could lead to countries walking away from negotiations, posing a significant risk, Papic further warned.

The tariffs on India, set at 26%, are lower compared to those on China (54%) and Vietnam (46%), but still represent a significant increase from previous levels. These tariffs are part of a broader 10% baseline tariff on all imports to the US, with additional reciprocal tariffs varying across countries.

In terms of broader market implications, there is an absolute exodus from the USA in the last six weeks, Papic said. Almost every equity market has outperformed the US market. Every equity market, including India, will outperform the US, according to him.