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Trump's Tariff Formula Makes No Economic Sense. It's Also Based on an Error

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Re: Trump's Tariff Formula Makes No Economic Sense. It's Also Based on an Error

#21

Post by jmyeet »

There are two silver linings to all this:

1. The evisceration of American soft power will really diminish the direct and indirect harm the US intentionally and unintentionally causes. Just look at China, South Korea and Japan deciding to respond to tariffs together [1]. That is an absolutely astonishing event given fairly recent history. Future retellings of history will correct portray the US as the actual Evil Empire; and

2. All of these actions are doing a ton to break the myth of meritocracy. The people involved in this, at the highest levels, are clearly demonstrating just what complete and utter morons they are. This is why fascism flames out: valuing loyalty above all else results in an administration of sycophantic morons.

This is going to do untold economic harm in the interim but ironically it's accelerating the rise of China as a global power, despite the fact that this administration are China hawks and see these tariffs as a means reducing China's power, which it won't.

[1]: https://www.reuters.com/world/china-japan-south-korea-will-j...

Re: Trump's Tariff Formula Makes No Economic Sense. It's Also Based on an Error

#22

Post by charcircuit »

>The trade deficit with a given country is not determined only by tariffs and non-tariff trade barriers, but also by international capital flows, supply chains, comparative advantage, geography, etc.

All of those other things, minus geography are influenced by the terrifs. Terrifs make economic incentives to invest in America, for America to gain comparative advantages, etc.

Re: Trump's Tariff Formula Makes No Economic Sense. It's Also Based on an Error

#23

Post by rramadass »

This is what i was thinking of yesterday after folks on HN pointed me to the "official formula" from the govt. I could not understand why the "elasticity" parameters were chosen in such a manner as to cancel out. Now it seems it was chosen deliberately to give "room for maneuvering" when the concerned countries inevitably come to the negotiating table; never mind that the formula itself is not economically sound. It also explains why Trump and his Team keep saying the "economic hardships" will be short-term and will get better soon.

Re: Trump's Tariff Formula Makes No Economic Sense. It's Also Based on an Error

#24

Post by dragonwriter »

user1241320 wrote: post #14

Funny he put like Martinique which is a territory governed by France

It is even worse than that as Martinique is a “territory governed by France” in much the same way that Hawai’i is a territory governed by the USA.

Martinique is a region and department of France—and administrative subdivision of the same type as those in the French mainland, differing only in that the the top two levels of subdivision (region and department) are coextensive rather than nested in Martinique and the other overseas region/departments.

Re: Trump's Tariff Formula Makes No Economic Sense. It's Also Based on an Error

#26

Post by colechristensen »

deepfriedchokes wrote: post #7

Trump was the emotional vote, and he is governing emotionally.

no, this is not emotional government

it's just incompetence

real estate allows a lot of bullshit from a leader like this because they're not going to go in and give orders to the structural engineers or the electricians that can actually cause huge problems, the only thing a bullshit artist is going to influence are the outward appearances which are easy and you can't do so wrong that the building falls over. the thin facade can really just be whatever and you can always screw over a new set of suppliers or go bankrupt again and keep going

now the lifelong real estate scammer is taking that facade bullshit attitude which basically couldn't go wrong and directing towards the very impactful machinery of the global economy expecting the same kind of bluster to be the same kind of effective

it's not emotional reactions it's just stupidity, people who didn't understand things voted for the guy that puts on a much better show

and didn't vote for the people who put on a terrible show, displayed zero hutzpah, and have the attitude of "i know better than you" and "i told you so" and make no effort to hide it

Re: Trump's Tariff Formula Makes No Economic Sense. It's Also Based on an Error

#28

Post by overdrive110 »

user1241320 wrote: post #14

Funny he put like Martinique which is a territory governed by France

First I thought it could make sense considering the territories have some differences in taxes on imports. But in that case, why is Åland missing then?

Re: Trump's Tariff Formula Makes No Economic Sense. It's Also Based on an Error

#29

Post by GIFtheory »

colechristensen wrote: post #11
thih9 wrote: post #6

Earlier quoted context omitted.

Does anyone here know what is the impact of this for Lesotho in practice? I found an article[1] but perhaps someone here knows more or is there in person. > Lesotho exported $237m of goods last year to the US and imported $2.8m. Agoa[2], which has allowed tariff-free access to the US market for thousands of product types since 2000, created a thriving garment industry, accounting for about 20% of GDP. > There are abo…

I want the people who work to make the things I use to earn more than $150 per month. A sane tariff policy would be set up to penalize these very low wage exporters to give competitive advantage to exporters and local producers with higher wages but also to incentivize higher wages in a way that set rates make producers more profitable if they paid workers more (and likewise other human development and environmental…

I don’t see how tariffs magically create wealth for foreign exporters that translates into higher wages. Let’s say I can buy a $10 shirt from Lesotho with zero tariff. Now a 50% tariff gets imposed. I can either eat the tariff and pay $15, in which case Lesotho still gets their $10, or Lesotho can eat the tariff to keep their exports competitive, in which case Lesotho now makes $5.

The part about giving a competitive advantage to local producers is true, though…

Re: Trump's Tariff Formula Makes No Economic Sense. It's Also Based on an Error

#30

Post by tombert »

__MatrixMan__ wrote: post #25

It makes plenty of sense if you consider that it wasn't designed to benefit the US, but rather to drive US trade to our competitors.

Considering how open they've been about their clear conflicts of interest (Trump launching a cryptocurrency on day 1 of his presidency, being in charge of a publicly traded company that he's made no effort to remove himself from, and the Diablo cheater being in charge of a department that gets to determine "efficiency" while also bidding on government contracts), I think we should really consider the possibility that Trump and Musk shorted or bought Puts on companies that would be hit especially hard by tariffs.

I debated doing that. I wish I had, I would have made a bit of money in the last few days.

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