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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

#51

Post by colechristensen »

GIFtheory wrote: post #29
colechristensen wrote: post #11

Earlier quoted context omitted.

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…

for countries that pay a worker $10 a day, put a tariff on the goods produced by that worker to total $10

for countries that pay a worker $15 dollars a day put a tariff on the goods produced by that work to total $4

therefore someone importing goods produced by one worker in one day from the lower wage country would spend $20 for the goods from the lower wage country but only $19 for the goods for the higher wage country giving a competitive advantage for higher wages

obviously that is a simplistic example but that's what i mean using tariffs to incentivize better behavior and level the playing field so the most exploitation doesn't make the most money

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

#52

Post by input_sh »

charcircuit wrote: post #12
input_sh wrote: post #9

Earlier quoted context omitted.

Am I surprised they used a list of ccTLDs to get a list of countries? No. Am I mildly amused to know someone somewhere had to manually remove Soviet Union (.su) from a list of countries to put a tarrif on? Absolutely.

Why wouldn't they use ISO 3166 directly which doesn't contained outdated countries?

I mean, any "definitive" list of countries is gonna be inaccurate in some way.

For example, according to ISO 3166, Kosovo is not a country, but Antarctica is, which isn't particularly useful in real-world scenarios. Kosovo does have its own ccTLD (.xk, although it's supposed to be a temporary one) and were tariffed.

The reason I've mentioned Soviet Union in particular is that its domain is still active. You can go and buy .su right now, unlike say .yu (Yugoslavia), .dd (East Germany) or .cs (Czechoslovakia), which were deprecated.

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

#54

Post by user1241320 »

dragonwriter wrote: post #24
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 ot…

Potentially France could have all imports from US pass by Martinique and they’d save a lot of money

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

#55

Post by walterbell »

> The formula for the tariffs, originally credited to the Council of Economic Advisers and published by the Office of the United States Trade Representative, does not make economic sense.

There is a 2024 paper (40 pages) by Stephen Miran, chair of the Council of Economic Advisers, https://news.ycombinator.com/item?id=43589350

  The root of the economic imbalances lies in persistent dollar overvaluation that prevents the balancing of international trade, and this overvaluation is driven by inelastic demand for reserve assets. As global GDP grows, it becomes increasingly burdensome for the United States to finance the provision of reserve assets and the defense umbrella, as the manufacturing and tradeable sectors bear the brunt of the costs... Tariffs provide revenue, and if offset by currency adjustments, present minimal inflationary or otherwise adverse side effects.
https://financialpost.com/news/stephen-miran-economist-trump...

> Miran.. points to Trump’s application of tariffs on China in 2018-2019, which he argues “passed with little discernible macroeconomic consequence.” He adds that during that time the U.S. dollar rose to offset the macroeconomic impact of the tariffs and resulted in significant revenue for the U.S. Treasury.. “The effective tariff rate on Chinese imports increased by 17.9 percentage points from the start of the trade war in 2018 to the maximum tariff rate in 2019,” the report said. “As the financial markets digested the news, the Chinese renminbi depreciated against the dollar over this period by 13.7 per cent, so that the after-tariff USD import price rose by 4.1 per cent.”

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

#56

Post by DarknessFalls »

Trump said he is open to negotiation on these tariffs. The factor of four difference is likely intentional padding. This way, he can:

1.) Shock the market into dropping several hundred points on the S&P and Nasdaq indices, thereby making quite a bit of money on the way down and then back up again. and

2.) Lower tariffs in exchange for patronage from countries or specific businesses that want a port opened in this new trade firewall.

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

#57

Post by more-nitor »

titaniumtown wrote: post #43
more-nitor wrote: post #31

Earlier quoted context omitted.

[flagged]

This post reads like its an AI generated bot trying to stur something up.

I'm sorry but Americans including democrats were really harsh on biden on the last election.

Arrange a political debate right after a diplomatic tour, with huge jet-legs sleep loss?

free-trans-surgery with tax payer money?

no wonder that man went "fck this"

I just wonder if democrats simply gave up on the last election

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

#58

Post by tdb7893 »

charcircuit wrote: post #22

>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.

I mean yeah those are influenced by tariffs a bit (I think it's a safe assumption that the writers of the article know that). It doesn't change the fact that those are mostly driven by things besides US tariffs.

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

#59

Post by SpicyLemonZest »

pj_mukh wrote: post #40
colechristensen wrote: post #11

Earlier quoted context omitted.

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…

"incentivize higher wages in a way that set rates make producers more profitable if they paid workers more" That sounds amazing..how would that work?

You can just put in the trade agreement that the goods are subject to tariffs unless the workers who made them are paid enough. The USMCA, for example, has requirements along these lines for auto assembly (https://www.dol.gov/agencies/whd/usmca).

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

#60

Post by jayd16 »

kristopolous wrote: post #27

I wonder if he and his friends opened a bunch of options the morning of and are now collecting their winnings... he does have a bunch of crypto pump and dumpers as advisors.

Not only that, but I assume they'll take more bites of the apple as they go down the list country by country and negotiate better rates for some kind of kickback and market manipulation opportunity.
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