Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

aei.org

Post reply on HN
Print view View original

191–200 of 205 posts

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

#191

Post by nxobject »

Izkata wrote: post #131
seydor wrote: post #85

I believe the idea was "Very High Tarrifs" and the formula was some kid in MS Excel . They are definitely not reciprocal. They don't need to be, since the plan was to use the high tarrifs as negotiating tool to somehow reduce the US national debt

Article links here which explains how they did it, with reasoning and references: https://ustr.gov/issue-areas/reciprocal-tariff-calculations

My favorite citation is curiously missing from the references (as of Sat April 5, 6:40 EST):

> The recent experience with U.S. tariffs on China has demonstrated that tariff passthrough to retail prices was low (Cavallo et al, 2021).

The line that says "sure, tariffs won't cost consumers _that_ much", and they don't even have a bibliographic entry for Cavallo et al. 2021.

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

#192

Post by tim333 »

greaber wrote: post #63

Doesn't this formula also punish circular trade patterns in a strange way, like if the US imports $X of good from country B and country B imports $X of goods from country C and country C imports $X of goods from the US, and there are no flows in the opposite direction, then the US would impose an infinite tariff on country B since US imports from B are zero?

Almost but the formula actually says trade with B is X, deficit is X, their effective tariff on the US is X/X =1 or 100%, the US tariff on them would be half or that or 50%.

There's a list of real tariffs for various countries here https://x.com/ianbremmer/status/1908609257756336239

The circular situation seems not so common but countries like Camboidia don't import much from the US because the people there don't have much money, so the Trump formula makes their 'effective rate' 97% whereas their actual tariffs are 7.9%. The net effect is to hammer the poorest countries.

Ironically the Cambodians don't have much money to buy US stuff because of terrible governments that got in partly as a result of the US destabilizing things by bombing the country. They don't seem to have much luck with the US.

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

#193

Post by ethbr1 »

monkeyfun wrote: post #185
EasyMark wrote: post #179

Earlier quoted context omitted.

I don't think it's LLM, not everthing is AI, just because that's the hot topic of the day. This forumla is too simple, it's essentially 0.5 * (their_portion_of_trade_deficit / total_trade_deficit_with_country) % . It's not complex at all and that formula fits all the % calculated by Trump's board of "liberation" too closely to not be essetially what he and his cronies came up with. Likely one of the DOGGie boys

But how do you explain an uninhabited semi-independent (as i understand it) island with no trade with the US getting higher tariffs than Australia, the country it's broadly part of?

Because the intent of the tariffs is to prompt currency exchange rate moves and/or defense deal reevaluation.

Everyone is reacting to this like it's a mystery. The architect literally wrote down the why: https://news.ycombinator.com/item?id=43594549

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

#194

Post by johnnyanmac »

roflyear wrote: post #182
maeil wrote: post #114

Wonder why this has been flagged.

It is weird that HN isn't talking about tariffs at all - since this is probably the biggest economic mixup since COVID.

Some people really Will try to avoid politics at all costs, even if their own savings crater from it.

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

#195

Post by senectus1 »

could this possibly be a long term strategy to eliminate china as a threat?

ie, Huge tariffs on China means US doesnt buy from china, Huge tariffs FROM china means us doesnt SELL to china...

a country isolated is a country that slowly chokes...

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

#196

Post by MattPalmer1086 »

colechristensen wrote: post #189
MattPalmer1086 wrote: post #134

Earlier quoted context omitted.

It's clearly not protectionism, because you wouldn't put tariffs on everything - including all the raw materials and parts you need to import, if you wanted your local industries to succeed. And you'd have a coherent industrial policy to go along with it.

Protectionism is France and England putting tariffs on each others cheese. America putting tariffs on Canadian lumber. Putting tariffs on places that have a 20x factor difference in wages is something else. And protectionism isn't necessarily a dirty word. It's often valuable to save your local industries from being wiped out and to not have a foreign country have complete control of a necessity.

My point is only that these tariffs cannot be motivated by protectionism, since they are not targeted and will also disadvantage local industry.

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

#197

Post by mikrotikker »

monkeyfun wrote: post #185
EasyMark wrote: post #179

Earlier quoted context omitted.

I don't think it's LLM, not everthing is AI, just because that's the hot topic of the day. This forumla is too simple, it's essentially 0.5 * (their_portion_of_trade_deficit / total_trade_deficit_with_country) % . It's not complex at all and that formula fits all the % calculated by Trump's board of "liberation" too closely to not be essetially what he and his cronies came up with. Likely one of the DOGGie boys

But how do you explain an uninhabited semi-independent (as i understand it) island with no trade with the US getting higher tariffs than Australia, the country it's broadly part of?

That island did actually trade with the US as Australia did a couple mil of trade through it for some reason

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

#198

Post by mikrotikker »

EasyMark wrote: post #180
__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.

It's designed to destroy America's position in the world and is almost certainly a dictate from Russia. I mean they didn't even put tariffs on our most antagonistic supposed adversary, and why would they do that other than he has Trump by the short hairs? for god sakes they put tariffs on penguins on a virtually unknown island nation.

I think that Russia was omitted to give something to use in the peace talks alongside the secondary sanctions that have been threatened. Regardless there should be zero trade happening with Russia because of the sanctions so why would tarriffs make sense.

I also feel that this is a ripping the band aid off approach to destroying globalism. The Biden administration was already toning down the globalism of Peter Ziehan was correct, as we saw with their tepid responses to the red sea fiasco but now Trump has upped the attacks on the houthis too so I'm not quite sure what to think.

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

#199

Post by roflyear »

krapp wrote: post #183
roflyear wrote: post #182

Earlier quoted context omitted.

It is weird that HN isn't talking about tariffs at all - since this is probably the biggest economic mixup since COVID.

Why would HN be talking about tariffs? That's the sort of mundane concern you'd find covered on TV news, and good hackers shouldn't find such things interesting. Let's talk about... umm... set theory? Graphics cards? Python?

It's going to be really interesting!

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

#200

Post by __MatrixMan__ »

mikrotikker wrote: post #198
EasyMark wrote: post #180

Earlier quoted context omitted.

It's designed to destroy America's position in the world and is almost certainly a dictate from Russia. I mean they didn't even put tariffs on our most antagonistic supposed adversary, and why would they do that other than he has Trump by the short hairs? for god sakes they put tariffs on penguins on a virtually unknown island nation.

I think that Russia was omitted to give something to use in the peace talks alongside the secondary sanctions that have been threatened. Regardless there should be zero trade happening with Russia because of the sanctions so why would tarriffs make sense. I also feel that this is a ripping the band aid off approach to destroying globalism. The Biden administration was already toning down the globalism of Peter Ziehan…

Currently the omission looks like it's a message being sent from Russia:

> Hey look, we write US policy, don't mess with Russia or we'll have the US mess with you.

If that's not the case, why not take the zero-cost step to avoid making it look like that's what it is?

Post reply on HN