US Administration announces 34% tariffs on China, 20% on EU • Hacker News Board

Re: US Administration announces 34% tariffs on China, 20% on EU

#621

Post by timr » Thu, Apr 03, 2025, 2:47 PM UTC

rthomas6 wrote: post #613

TaurenHunter wrote: post #599

I don't see anyone mentioning that the United States needs to manage its massive national debt, currently in the trillions, by issuing Treasury securities. These securities mature at varying intervals and require continuous "rolling" or refinancing to pay off old debt with new borrowing. Significant rollovers are expected from April through September 2025, with additional short-term maturities due by June. Higher int…

The flaw I see is centered around this paragraph. > How can rates come down? The present uncertainty around tariffs and a potential crisis could create conditions that pressure interest rates downward before those Treasury securities mature, by influencing Federal Reserve policy. Rising prices due to tariffs won't pressure the Fed to lower interest rates. It will increase inflation and worries of inflation, which wil…

Prices rising due to tariffs isn't "inflation" in any traditional sense. It's not driven by consumer demand, and therefore the logic for raising rates (i.e. slowing economic growth by reducing money in the market) doesn't apply.

Re: US Administration announces 34% tariffs on China, 20% on EU

#622

Post by MaxHoppersGhost » Thu, Apr 03, 2025, 2:47 PM UTC

jorge-d wrote: post #358

mcoliver wrote: post #92

Here's a csv and google sheet of the data. Turns out they aren't tariffs countries charge us. They are trade imbalance percentages. Unreal: https://docs.google.com/spreadsheets/d/1xK0OQ5VGl8JHmDSIgbXh... https://gist.github.com/mcoliver/69fe48d03c12388e29cc0cd87eb...

It's even worse, they literally got their formula from a llm model (probably Grok?) => https://bsky.app/profile/dansinker.com/post/3llunnyfeoj2v "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.,…

LLMs are basically just good at sourcing ideas from the internet. Me thinks this just means that this tariff idea exists on the internet, especially since grok, chatgpt, etc all come up with the same idea. We used to not have income taxes and funded the govt with tariffs so this probably isn't a new concept despite media outlets pretending like it is.

Re: US Administration announces 34% tariffs on China, 20% on EU

#623

Post by xaldir » Thu, Apr 03, 2025, 2:47 PM UTC

Gasp0de wrote: post #353

A possible retaliation by the EU could be to not enforce US intellectual property rights in the EU anymore. Or we could start taxing cloud companies, who, until now, have not paid taxes in the EU for profits that they generate in the EU.

0% chance of this happening, but I like the idea.

Re: US Administration announces 34% tariffs on China, 20% on EU

#624

Post by TehCorwiz » Thu, Apr 03, 2025, 2:48 PM UTC

abvdasker wrote: post #619

TaurenHunter wrote: post #599

I don't see anyone mentioning that the United States needs to manage its massive national debt, currently in the trillions, by issuing Treasury securities. These securities mature at varying intervals and require continuous "rolling" or refinancing to pay off old debt with new borrowing. Significant rollovers are expected from April through September 2025, with additional short-term maturities due by June. Higher int…

If the Trump admin's goal were to reduce the national debt it would make way more sense to use fiscal policy (increase taxes) rather than some roundabout way to force the Fed's hand on monetary policy. The tariffs do basically function as a massive regressive tax increase in the form of a sales tax, but that comes with truly immense risks on the demand side of the economy. Guess what happens to tax revenue during a r…

There likely won't be any tax revenue. https://finance.yahoo.com/news/trump-wants-eliminate-income-...

Re: US Administration announces 34% tariffs on China, 20% on EU

#625

Post by lumb63 » Thu, Apr 03, 2025, 2:48 PM UTC

Everyone is quick to deride this move as stupid. I don’t disagree that there are downsides to the approach, but there is a set of very real national problems that this might address.

For instance, globalization and offshoring of production has made goods cheaper for consumers, but what about the former domestic producers who could not compete, and do not have the skills or capital to find a new job which pays as well? Increased foreign competition pulls down domestic wages; telling people that they should shut up and be okay with that because they can get cheaper goods isn’t palatable to a lot of people facing the negatives of globalization. Globalization has played a big role in creating the massive income inequality in our country; it seems like we should fix that.

There really are structural challenges to onshoring production due to strength of the dollar due to its reserve currency status; our society as such is biased heavily toward importing goods rather than exporting goods. This is a real challenge that needs to be addressed as well.

Our national debt is not sustainable either. Either we pay it down some, or we inflate it away; these are the two ways it goes away, ignoring the option of a world-shattering default on the debt. Tariffs accomplish both of those, raising money at the same time as raising cost of goods and weakening the dollar.

So, to anyone who disagrees with these measures, but agrees that these are issues we ought to solve, what would you propose?

Re: US Administration announces 34% tariffs on China, 20% on EU

#626

Post by mk89 » Thu, Apr 03, 2025, 2:48 PM UTC

I am not an economist but I see two things 1) usa has a huge debt, 2) this feels a lot like VAT applied on a federal level, without calling it VAT. Ok "VAT on imports". Why not.

Obviously this is being sold as a trading surplus BS, etc, but if you look at EU, the surplus is ridiculously low when you consider goods and services (something like 50B).

I don't think it's the worst idea ever, I just dislike the useless hatred that this guy is spreading around and all the idiots believing him. But hey if he hadn't done it, people would have said he is a socialist :)

Re: US Administration announces 34% tariffs on China, 20% on EU

#627

Post by pjc50 » Thu, Apr 03, 2025, 2:48 PM UTC

TaurenHunter wrote: post #599

I don't see anyone mentioning that the United States needs to manage its massive national debt, currently in the trillions, by issuing Treasury securities. These securities mature at varying intervals and require continuous "rolling" or refinancing to pay off old debt with new borrowing. Significant rollovers are expected from April through September 2025, with additional short-term maturities due by June. Higher int…

Tariffs increase prices. This tends to cause a wage-price spiral, and indeed that's one of the stated objectives (increase US wages by onshoring manufacturing). The increase in prices and wages is inflation. This will cause the Treasury to raise rates to force contraction.

Now, so far rates have indeed spiked downwards, but not a huge amount: https://tradingeconomics.com/united-states/government-bond-y...

The next consideration is: what is the budget actually going to look like? Is it going to cut spending and leave taxes where they are, resulting in debt paid down, or is it going to be a huge tax giveaway to the top few % while increasing the deficit? (personally I'd bet on the latter)

Then the consideration: other players also get a move. What do the retaliatory tariffs look like? Does cutting off the ability of other countries to earn dollars negatively impact US exports?

Devaluing the dollar against other currencies will also force up rates by the arbitrage principle.

S&P down 4% so far today. Do we think that indicates the measures are good or bad for US industries?

Re: US Administration announces 34% tariffs on China, 20% on EU

#628

Post by oceanplexian » Thu, Apr 03, 2025, 2:49 PM UTC

jquery wrote: post #134

TrackerFF wrote: post #62

From what I understand, de minimis exemption has also been removed. That is a huge, huge deal. It effectively means that all goods imported from China will be slapped with a 30% import tax, as soon as said goods arrive the US border / customs. Usually what happens then, is that the courier will pay that tax, and then bill the recipient later on - as well as charge some fee/fees for the work done. This is why in some…

Well, the good news is almost nobody is gonna like this, so I don't anticipate it lasting beyond Trump's presidency, assuming he makes it 4 years at this rate. The bad news is that even after tariffs are removed, it will take years for prices to recover, if they ever do.

Actually one policy that Biden kept in place after the 2020 elections was the Trump Tariffs.

I think we are underestimating how popular protectionism is with progressives, it may turn out to be an unusual alliance between disaffected voters on the far right and left outnumbering free trade advocates in the center of both parties.

Re: US Administration announces 34% tariffs on China, 20% on EU

#629

Post by joshdavham » Thu, Apr 03, 2025, 2:50 PM UTC

doener wrote: post #225

"This guy cracked the tariff formula: @orthonormalist It’s simply the nation’s trade deficit with us divided by the nation’s exports to us. Yes. Really. Vietnam: Exports 136.6, Imports 13.1 Deficit = 123.5 123.5/136.6 = 90%" https://x.com/Geiger_Capital/status/1907568233239949431

Can anyone else confirm this is true? I’m feeling a bit sceptical here.

Re: US Administration announces 34% tariffs on China, 20% on EU

#630

Post by srj » Thu, Apr 03, 2025, 2:50 PM UTC

roxolotl wrote: post #479

Aside from everything else one thing what strikes me as particularly insane is how it’s not even defensible as a protective measure. My favorite everyday olive oil comes from Tunisia. They now have a 38% tariff on them. There are no out of work olive farmers in the US. The orange man wanted tariffs, the orange man is going to get tariffs. Now we have to hope the American people aren’t so dumb as to still be convinced…

>> There are no out of work olive farmers in the US.

I'm not sure this is true. I buy olive oil specifically from California. It's niche but could be larger if they weren't competing with lower overseas labor costs.