Someone figured out that the new tariffs are just our trade deficit with that country divided by the country's exports. I think more and more we see lots of evidence they don't know what they're doing.
Note that the White House has both (1) officially denied this, (2) provided the formula they assert was used as support for that denial; but the formula is exactly what they are denying but with two additional globally-constant elasticity factors in the divisor, however, those elasticity factors are 4 and 0.25, so...
It would have been hilarious back in 2001. It's... scarily prescient in 2025. Can satire be just too good?
[0]: https://theonion.com/bush-our-long-national-nightmare-of-pea...
but for some reason a whole heap of people decided to stay home this time and this is the result, hope they still feel happy with their decision
It don't want to sound too persnickety, but there is always at least one losing side in an election. It doesn't have to mean they dropped the ball, it could just mean people preferred the other option. Hindsight bias is wonderful, but you have no idea what would have happened if they'd run with a different agenda, they may have had a worse result.
The 2024 election had historically-low support from normally stalwart Democrat demographics such as Latinos, the youth vote, and black males. That, IMO, supports the conclusion that the Democrats did something wrong this time. Also, not only did those groups abstain but Trump also picked up quite a few votes from them (especially working-age black males), suggesting that they are swing voters who probably could have been swayed to stay on the Dem plantation if exposed to more convincing messaging, or a more compelling Democrat candidate.
E.g. one explanation given for these trade policies is that trump sees a war with china down the line and is worried that china has tons of factories that could be converted to make ammunition while usa does not.
If so, there is at least some logic to the base idea, but the implementation is crazy, probably not going to work that effectively, and going to piss off all amrrica's allies which would be bad if WW3 is really on the horizon.
Anyways, I hope you're looking foward to prices for everything going up.
E.g. one explanation given for these trade policies is that trump sees a war with china down the line and is worried that china has tons of factories that could be converted to make ammunition while usa does not.
2. Alienating allies won't help the US produce ammunition
So is destroying diplomatic relations with all their allies and trying to force ceding of power in central Europe to a former enemy who is allied to China?
Go on with ya.
He's a prick saving himself from prison whilst being willingly used to establish an oligarchic fascist state from the former USA.
The second order effects of what he's doing are pretty obviously terrible for usa, but quite frankly i dont think trump is smart enough to see that.
[To be clear i think trump is stupid, but i don't think his actions are entirely random. There is a chain of reasoning here, it just misses the forest for the trees]
Russia's invasion of Ukraine is more immediate concern there. Even if Europe still could count on the USA's NATO commitments 100% the war was a big wake-up call in terms of readiness.
The proximate cause for these tariffs is not some future event. This is post fact rationalization.
The proximate cause is still the ongoing “information” war which determines the perceived reality that is litigated in elections.
Earlier politicians played theater, acting as if the red meat being fed to voters was real on TV, but dealing with reality as need be when it came to decision making.
This was a betrayal of voters, who saw their election efforts result in legislators who didnt do what they said.
Trump does what he says. He believes WWE is real, and acts as if it is. His base believes it is real, and now reality is crashing with the fiction.
The fiction will prevail, because his party has also been working to build the power to enact their will.
Everyone sees logic here, the same way that everyone saw the emperors clothes. The alternative is illogical.
This is the reason potential reasons “we dont know” have to be postulated (war / China can make more ammunition)
Trump has always liked tariffs [alas, I can't find the source for this pre-presidency, its been blown out by current events]. He thinks trade is a zero sum game, and thinks that someone else set up the petro-dollar system.
Trump has consistently and reiliably always cowered away from war. Using other means to stop it (see russia, NK, China, Iran). Yes I hear the "we're going to invade x, y and z" but they never acutally came to anything (is that because of his advisors?)
Trump doesn't think about future capacity, only future pride. Does this change "make american stronger, and other weaker" is pretty much the only calculus that he's doing.
Trump's thinking is roughly as following:
"Why do we have taxes when we can use tariffs to raise cash and bring power back?"
"Why don't they buy from us?"(china/rest of asia)
"why are we spending money on them, when we don't get any money back? They are weak."(NATO)
"Why are we punishing russia, they are offering deals" (Putin offering cash deals)
There is no 4d chess. Its just a man who's pretty far gone, shitting out edicts to idiots willing to implement them.
Here you go, Feb 2011: https://money.cnn.com/2011/02/10/news/economy/donald_trump_c...
"The comment repeated past statements from "The Apprentice" star, who has said he wants to put a 25% tariff on all Chinese imports, to level trade imbalances in the global economy."
Doesn't help that Google's custom time range search is complete garbage. Searched for "trump tariffs" from 1/1/1980 to 1/1/2010 and almost every link is about the current tariffs but with timestamps between 1980 and 2010.
e.g. "20 Nov 1987 — President Donald Trump issued a slew of tariffs on Chinese goods", "30 Jun 1981 — Ontario Premier Doug Ford announced Monday a 25% increase on electricity exports to some American states as a result of President Donald Trump's tariffs", "31 Dec 1999 — IMF says too early for precise analysis on Trump tariff impact", "1 Feb 2001 — Trump's Global Tariff War Begins"
Did find a couple of links that were chronologically correct - a 1999 Guardian story about Trump wanting to tax the rich(!) and a 1987 NYT story about Reagan putting tariffs on Japan.
(duckduckgo was even worse)
https://www.thetimes.com/us/news-today/article/why-trump-tar...
At most we might see a proxy war over Taiwan (i.e. the US supporting and arming Taiwan, with sanctions against the PRC). The risk would then be a widespread disruption of global trade, at which point the US would not want to be dependent on the Chinese economy or factories in any way.
Trump is neither stupid nor insane and he will have access to many very smart people, too. Based on that the reasonable assumption is that they are trying to achieve a well-defined objective and have set a plan in motion to do so.
The "game" is thus to figure it out. @ggm's comment above is one possibility.
1. It is authoritarian. Democratically elected leader's duty is to present the policies he plans to implement so that voters can decide if they want them implemented.
2. It is based on the "4D chess" myth - that the leader is way smarter than the rest and is capable of outsmarting other countries. The history shows that it is never true. The leaders are normal people. And the institutions are as good as the founding principles that are honored by them.
(2) You just claimed trump has access to smart advisors and some hidden masterplan but you ignore all counter indication. He ousts critical journalists, nominates incompetent staff, invasion-mongers, tweets and plays golf alot.
If i can see any common factor in his insanity, its the need to have an enemy to pose as the strong man against, which indicates that trump does not have a constructive vision for the US.
That's 100% not true. A candidate leader might tell you what they're going to do, and then you elect the leader, and then they do them, but they don't propose plans once in power to see if the electorate like them.
As much as I'm not a Trump fan, I really don't like that people use a separate yardstick to measure him vs people they like.
Public consultations and transparency are two crucial and lately very under appreciated parts of democracy.
If a leader cheats the voters it is no longer democracy.
Maybe there's a website that keeps track somewhere.
The simplest solution is the right one. You are projecting intelligence, because you are used to.
This is AFTER the US government has roundly fired thousands of their experts and workforce, AND has just told everyone of its intelligence and army rank and file that there are no repercussions for a massive dereliction of duty.
AND IT IS ONLY APRIL.
It does not imply that what they are doing is a good idea or will work (whatever the objective is), just that there is more rational thought in what they are doing than what people might assume because the public does not have the information and seeing through what is going on requires insights that most people don't have, either.
Again, check @ggm comment above. I am not saying that this is what is going on but it is a possibility, and an average member of the public would never think of that scenario and thus wouldn't see the order in the apparent chaos.
Not insane, incompetent.
The problem with primarily hiring sycophants from his favorite cable news channel is that he's not getting the best, even from the GOP. This also makes him even more susceptible to people with their own agendas like Musk since no one is willing to pushback.
The UK for a good few years had a government which had both these attributes. They were only interested in policies which would appeal to their base, but eventually even those soured on them because the policies were implemented so badly.
https://www.hudsonbaycapital.com/documents/FG/hudsonbay/rese...
https://www.reuters.com/markets/us/markets-wrestle-with-trum...
>In a November paper, economist Stephen Miran, whom Trump has picked to chair his Council of Economic Advisors, raised the possibility that Trump could use the threat of tariffs and the lure of U.S. security support to persuade foreign governments to swap their Treasury holdings for lower-cost century bonds.
Via
https://news.ycombinator.com/item?id=43350553 https://news.ycombinator.com/item?id=43561808
Just so pple get the credit (even if they appear to be not so sane)
Soon to be "Numerals of America"
I'm stunned.
https://ustr.gov/issue-areas/reciprocal-tariff-calculations
"To calculate reciprocal tariffs, import and export data from the U.S. Census Bureau for 2024. Parameter values for ε and φ were selected. The price elasticity of import demand, ε, was set at 4.
Recent evidence suggests the elasticity is near 2 in the long run (Boehm et al., 2023), but estimates of the elasticity vary. To be conservative, studies that find higher elasticities near 3-4 (e.g., Broda and Weinstein 2006; Simonovska and Waugh 2014; Soderbery 2018) were drawn on. The elasticity of import prices with respect to tariffs, φ, is 0.25."
Yes, let's assume the world is constant and changes are made in isolation.
These people are either malicious or incompetent. That's been the case for every single day of the decade-ish that Trump has been foisted upon us.
https://bsky.app/profile/amyhoy.bsky.social/post/3lluo7jmsss...
> Trump Tariffs Hit Antarctic Islands Inhabited by Zero Humans and Many Penguins
https://www.wired.com/story/trump-tariffs-antarctic-islands-...
Réunion is at 37%, which isn't a problem because any company in Reunion could just use an address on mainland France, but there's more: Guadeloupe, Martinique and French Guiana are tariffed at 10%.
Does that make an easy loophole for any EU company wishing to export things to the US at a 10% tariff?
If these published rates actually going to be enforced this way, it seems like the whole EU has a very easy way to use the 10% rate.
> The European Union (EU) has nine 'outermost regions' (ORs): Guadeloupe, French Guiana, Martinique, Mayotte, Réunion and Saint Martin (France), the Canary Islands (Spain) and the Azores and Madeira (Portugal). The ORs are an integral part of the EU and must apply its laws and obligations.
They are not part of Schengen (but EU citizens don't need any visa, it's mostly intended to curb illegal immigration from South America via Guiana) and have the ability to use different VAT rates from mainland France, but that's all.
The state of British citizenship is a bit more complicated though I think. A bit like US citizenship which kinda depends on which US territory one lives, as far as I understand.
This is what I meant when I said these citizenships work in more complicated ways than the French one.
Not quite, at least not by default. The pre-Brexit Manx passport did confusingly include the text "European Union" on its cover, but holders of Manx nationality were only citizens of the EU if they had lived for at least 5 consecutive years in the UK or if they descended from a UK parent or grandparent.
Source: https://en.wikipedia.org/wiki/Isle_of_Man-variant_British_pa...
I watched the man with my own eyes as he seriously floated the idea of injecting disinfectants to treat Covid-19. That was five years ago. His mental faculties have not improved since then.
His words to me felt they were those of a typical 5 year old, or an 80 year old with dementia, asking questions about subjects he doesn't understand but desperately trying to fit in.
But no, he did then ask about injecting a disinfectant.
Now it's quite possible Trump doesn't know the meaning of the word "disinfectant".
In the same press conference he also asked if "heat and light" will get rid of covid.
(Although of course he says this as "suggestions" and the "I'm just asking questions" tactic)
It's not that there's no strategy, it's that it was designed by reckless amateurs who haven't done the reading, haven't consulted with anyone that understands all the trade-offs, and have an uncapped appetite for risk.
The TV version works out perfectly, since the writers control the ending.
> ... The price elasticity of import demand, ε, was set at 4.
> ... The elasticity of import prices with respect to tariffs, φ, is 0.25. ...
None of the values are related to their names in any way
Trump personally may or may not understand it (I think he does) but his political superpower is his willingness to stand up in public and say complete bullshit knowing that it's bullshit, knowing that some people are fools who will uncritically believe the bullshit, and other people are cynics who who will nod along with the bullshit either to make money out of the rubes or because they think it serves a strategic purpose.
You can waste years wondering which side of Hanlon's razor someone is on, but it's important to remember that obsessing over such dilemmas can lead to paralysis. Just like there are a lot of street hustles and cons that depend on confusing/misleading the mark before tricking or mugging them out of their money, there are a lot of political gambits that depend on inducing analysis-paralysis in opponents. Manufacturing dilemmas is also a key element in military strategy.
My advice is to stop worrying about whether these people are such fools that you owe them some sort of empathy and an effort to save them from themselves, or you will end up like Charlie Brown having the football pulled way by Lucy yet again. It is OK to cut them off and treat them as bad actors, for the same reason you should often round off quantitative values instead of obsessing over precision.
Politicians are just pretending to be dumb? Why?
>There is no way these people don't understand the difference between expressing a trade deficit as a ratio and actual tariffs laid by other countries.
I don't think most people deny that these are capable individuals. The problem is - I think the people in Trump's inner circle now are sycophants first. They know what Trump is doing is destructive, but they are just choose to be yes men. Remember, this isn't Trump's first go-around, and the majority of people who stood up to Trump the first time (Pence, Barr, Perry, Price, Rex Tillerson) are gone.
Funny enough wikipedia has an article[1] about this that is so large that it has many sub articles. Ultimately, I can't trust that his appointments are exercising any sort of discernment because a large number of his 2016 appointees were fired for doing so.
In short, Fitzgerald could be a genius, but all signs point to him being a yes-man that would rather sink the ship than stand up to Trump.
[1] https://en.wikipedia.org/wiki/List_of_dismissals_and_resigna...
I told you: because it creates a strategic dilemma that paralyzes the opposition. The same reason a hustler pretends to be dumb to lure the mark, the same reason trolls use shitposting to bait people.
His name is Howard Lutnick. He was CEO of a financial firm called Cantor Fitzgerald. https://en.wikipedia.org/wiki/Howard_Lutnick
It is not as if he is going to die of starvation because of tariffs. He has no skin in the game.
To hide their motives, if you think they are just dumb then you will not look for the real reason they do it.
Not sure that is what happens here, but that is a very common reason to play dumb.
If this is the case, we could at least likely put to rest most concerns that Trump will be implementing much of Project 2025.
I'd be very surprised if he had too much to do with that plan directly. Assuming that's true, and if he's only surrounded by yes men, no one is there to convince him to do anything other than exactly what he himself wants to do.
But in this case: what is the game plan? What are they trying to achieve? Is it simply chaos, so that they can rule in perpetuity?
You probably want to be more careful with how you phrase that. The Republican party passed the Civil Rights Act and ended slavery, among other things.
Those may not be the type of Republicans you are thinking of today, but they still had that little (R) next to their names.
Way more Democrats in both houses of Congress voted for it than Republicans (to be fair the Democrats held the Senate 67-33). A Democratic president signed it. His Democratic predecessor asked for it. How do you figure "the Republicans did it"?
https://en.wikipedia.org/wiki/Civil_Rights_Act_of_1964#By_pa...
Lutnick clearly has zero actual influence in this administration. He's a barking dog sent to do TV soundbites, and his explanations are often full-bore nonsensical or completely contradictory to his prior explanations. Foreign officials (such as Canada) have repeatedly come out of meetings with Lutnick almost...assuaged....as if Lutnick is saying "he isn't really going to do this...there's no way", because even Lutnick doesn't realize just how stubborn Trump is about his outrageously stupid ways. These guys keep trying to pretend this is all some masterful negotiating strategy by the Art of the Deal master.
And based upon 100% of Trump's history in government, it won't be long before Lutnick and Bessent are out of this admin, both will be "RINOs" attacked by the MAGA cult, and they'll both be telling the tale of how outrageously stupid Donald Trump is. Like closing on 100% of Trump's administration in the first term.
Just look at the lead up to these tariffs. The day before Trump was still "deciding". This is something that a team of expert economists should have worked on for months, probably to conclude that free and liberal trade is what made the US the richest large country on Earth, but instead it was something that everyone had to sit around and wait for Trump to pull something out of his ass.
Trump has openly and widely talked about tariffs replacing income tax for years. This administration is clearly one where no one ever can counter any harebrained idea from Trump -- and they're all incredibly stupid ideas from that incredibly stupid man -- so whatever nonsensical takes he has they have to all try to make talking points around and create some post facto rationalizations. It is the most dangerous administration in human history, and the American voter looked at this traitorous, constitution-shredding, law-breaking imbecile and said "more please!"
There is no 4D chess happening here[1]. There isn't even checkers happening. No masterful long term negotiating strategy. It's just a fumbling moron (rapist, charity-stealing imbecile) that is doing the most nonsensical way to deal with a deficit rather than, you know, raising taxes. And to be clear the US deficit is untenable and needs to be dealt with, and the head in the sand approach by successive governments is not reasonable, but combining DOGE's ham-fisted stupidity with Trump's economic destruction and the deficit is likely going to be much, much worse. The US is on the fast track to insolvency.
"But China....next war....China!"
Trump started this whole thing by attacking allies. By dissolving alliances and trying to economically harm its closest friends. Precisely the opposite of expectations if the US were seriously trying to counter China.
[1] Aside from corruption. Tariffs are the foundation of corruption because everyone has to come, hat in hand, begging for exemptions. There is going to be a line to the White House of manufacturers and importers, from Apple to military contractors, begging for special waivers. Which they'll get if they grease the right palms, as this is the most blatantly corrupt administration in US history. He's selling pardons in the open, and operating a literal protection racket, and this is just...an ordinary day now.
If one does want to impose a large block of tariffs, it does seem reasonable that you would want to keep details quiet until the entire package is announced. You wouldn't want other countries responding early
And these apply immediately. This is an administrative impossibility. CBP is going to have a disastrous couple of weeks about this rag tag collection of barely defined nonsense.
This is 100% disaster, top to bottom.
The comment I replied to was claiming that Trump himself was still deciding what the tariffs would be until this week. My question was how we could be so certain of that.
As far as reciprocity goes, how is this plan not based at least in part on reciprocity? They claim other countries have taken advantage of the US and we're on the losing end of trade deficits. The tariffs they announced seem to be based entirely on trade deficits/surpluses with each country.
I have no idea if this would work or what the administration's real motives are, but the on the surface it sure seems like they proposed tariffs that target the problem they claim - trade imbalances.
And really that is a silly theory regardless. The US would achieve maximum effectiveness by doing a normal tariff legislative process and then soberly discussing with all parties. Instead it's constant on/off brinksmanship. Because Donald Trump is a profoundly stupid imbecile with a simpleton, child-like understanding of the world. There is going to be customs and business chaos as this is factored in.
>As far as reciprocity goes, how is this plan not based at least in part on reciprocity?
It has zero bearing on reciprocity. Reciprocity is matching the other party's tariffs.
If you're richer than the other party, or if they sell things that you want but you don't sell things that they want, that isn't reciprocity. It's like if I tariff my children when they buy from McDonalds -- I mean, McDonalds doesn't buy from me! - and claim it's reciprocity. That would be insanely stupid, right?
It's a massive tax hike on Americans -- a regressive tax that will hit the working and middle classes the hardest -- shrouded under some patriotic America thing. No way anyone falls for this...right?
Far as I can tell, the ideal would have been to simply double incoming tariffs, but that would be infeasibly large. This was a way to generate a plausible smaller number that can be increased later on an individual basis depending on how the country responds.
You're probably thinking of that one dead badger.
How doesn’t need to make as many of them anymore, so that’s a saving.
I went from a low risk investor to betting on US doing stupid stuff and stated making real money. Cognitive dissonance investment I think.
That's how you devolve into a 3rd world country by the way. I've lived in 3rd world countries and seen this over and over again. That's why 3rd world country stock markets don't go up - because locals and international investors have a distrust in them. Locals know insider trading is rampant.
Once this kind of corruption is accepted in society, everyone will need corruption in order to stay ahead.