TechFlow news, April 8 — According to Fortune, scholars from the American Enterprise Institute (AEI) have discovered a significant calculation error in the recent tariff policy announced by the Trump administration. The White House mistakenly used retail price elasticity (0.25) instead of import price elasticity (0.945) in its formula, resulting in tariff rates being overestimated by approximately four times.
If correct figures were applied, Cambodia's 49% tariff rate would drop to 13%, Vietnam's 46% would fall to 12.2%, and most countries would even fall below the White House's minimum threshold of 10%.
The error has triggered substantial market volatility, with notable declines in stock markets across the United States, Asia, and Europe. Some AEI economists have accused the White House of deliberately manipulating data to meet Trump’s desire for high tariffs.
The White House defended its approach, claiming that using retail prices is reasonable and arguing that actual tariff rates should be higher.
