Trump's Liberation Day mystery: Who actually devised tariff formula?

US President Donald Trump has rolled out a sweeping new tariff policy targeting major trade partners, in a bold attempt to "curb America’s growing trade deficits".

Dubbed the ‘Liberation Day’ tariffs, the decision was announced in a high-profile event at the White House Rose Garden and is reportedly aimed at correcting longstanding trade imbalances.

While Trump claims the policy will protect domestic industries and jobs, markets have responded with caution. Economists warn that the aggressive move could trigger retaliatory actions and heighten fears of a global trade war.

Also Read: India faces selective trade headwinds from US tariff impact, apparel sector most hit

Conflicting claims

The core of the controversy lies in the mysterious origins of the tariff formula. But even as markets react, confusion reigns over who devised the formula that underpins this aggressive trade move.

While some attribute it to the Council of Economic Advisers led by Stephen Miran, others credit the US Trade Representative’s office, adding to the mystery.

A White House official told the New York Post that Trump had consulted many aides and used “everyone as a sounding board,” keeping final decisions close to his chest. “The individual responsible remains a mystery to everyone I ask—or they’re keeping it secret,” the official added.

The issue has been further complicated by conflicting statements, with some providing contradictory indications of who was responsible.

Model used

White House sources pointed to the Council of Economic Advisers, claiming they used established models from international trade literature to calculate tariffs.

The model they use is based on the idea that the trade deficit with any given country reflects the cumulative impact of all unfair trade practices and instances of cheating, they added.

However, the very next day, chief White House economist Kevin Hassett contradicted that claim, stating that the US Trade Representative’s office led the charge by analysing trade deficits and tailoring tariffs accordingly.

Watch here: Donald Trump's 27% tariff on India: Impact on Indian economy

Global impact

The tariff structure is aggressive, raising fears of a growing trade conflict

India: 26%

China: 34%

European Union: 20%

Japan: 24%

Other nations (including UK): 10%

Implemented under the 1977 International Emergency Economic Powers Act, the measures aim to curb trade deficits and strengthen domestic manufacturing.

Trump defends the policy as essential for protecting American industries, while critics warn it may fuel economic instability and trigger a trade war