Summary
Donald Trump imposed sweeping “reciprocal” tariffs on dozens of nations, including a 104% levy on Chinese goods, claiming to boost U.S. manufacturing.
These tariffs, calculated by dubious trade deficit formulas, hit major trading partners like the EU, Japan, and South Korea.
Economists warn of rising inflation, recession risks, and potential stagflation. JPMorgan estimates a 60% chance of global recession, while U.S. consumers may face $2,100 in added yearly costs.
Despite retaliation threats, Trump refuses to back down. Businesses and allies express concern over economic damage and trade instability.
Don’t forget:
The “math” they said they used includes those two Greek letters
They have disclosed what those letters are supposed to mean, one is a 4 and the other is .25
So they just cancel out.
The issue is when they said where those numbers came from, economists pointed out the .25 should be pretty much 1. They referenced an academic paper but used the wrong number from what they said.
Since that part is in the denominator, that means all US tarrifs are 4x as high as they should be…
The highest tarrif if they used the right number would be 14%.
The admin has been aware of this for at least a day now, they just don’t care it’s wrong
They care a lot about not admitting they are wrong, no matter what though.
The whole thing is a shit show…
Like, they choose those two numbers intentionally so they’d cancel out, and then most likely said the one represents something else because those numbers never really mattered.
They’re doing backwards math
They start with the answer they want. And then backfill an equation to make it justify what they wanted and makes it look like it’s not their decision.
While making the calculation look complex enough that the unwashed masses won’t question it
Essentially they are doing the math equivalent of using big words to sound smart.
A. Whole. Lot. More.
My issue with pointing out the math error is that it isn’t even the actual problem - the entire concept is based on the incoherent idea that having a trade deficit is inherently a bad thing for some reason. The entire formula is junk, not just the one variable.
And yet, they are even more incompetent than that. Because even if we go along with the idea that all trade deficits are bad, that still wouldn’t explain why they would put tariffs on the countries where we already have a trade surplus.
Generally stuff like that is known as “fractally wrong”, no matter how many of their assumptions you grant them for the sake of the argument the rest still doesn’t make sense. Or put differently, much like a fractal you can zoom in to any magnification level and still get a picture that is fundamentally the same, bullshit at any level.
The entire formula is junk, not just the one variable.
Yep, and if you saw any of the interviews of the guy who figured it out, he makes that abundantly clear
But that’s the policy side, and that can be debated.
Math is math
So even if they legitimately think this will work, they’re doing what they want to do wrong.
Like if two people were arguing over if it was better to fly from NYC to Cali or drive. That’s debatable. If the person who wanted to drive then claimed gas would be free if they broke their fuel gauge so it always said “full” because then they’d never need to fill up…
It stops being debatable which is “better” and starts becoming explaining facts
That number is supposed to be how much of the tariff that the exporter passes through to the importer. Essentially this is a measure of how much the producers lower their profits to lower the price to compensate for the tariffs. In other words how much the producer “pays for” the tariffs.
This factor is “backwards”, in that it doesn’t represent how much the producer swallows, but how much they pass on to the importer. Trump’s calculations assume that the producer only passes on 25% of the tariff price increase, but the experts say the number should be much closer to 95%.
I have to idea what “4” means.
Can we avoid using the reciprocal word where it’s mostly an uniltaeral decision from US ?
I bet that the only US jobs that will be created on the short term will be to re-inforce the purchasing department of US companies importing foreign group, and the US-logistic department of foreign companies exporting in the US. But in between, I see why many corporation will push the brake on any non urgent purchasing. (And Ironically, business school graduates aren’t a category massively impacted by unemployement nor fearing to be replaced by LLM)
Hum… Putting them in quotes is nice, it reminds people of the claim.
I think the best would be to also explain in parenthesis, like: “reciprocal” (unilateral)
its sorta significant though since like china increased tariffs in response which if we are doing reciprical means that get added on to ours to. It effetively means we are just cutting trade off completely for all practical purposes.
Yeah, they should put that word in quotes
If the rest of the world trades with each other to replace the US, isn’t the US just fucked?
do they count google and facebook and Microsoft office licenses as exports? i thought the biggest companies in the world were in america
Those would count as services which Trump explicitly excluded from his calculation, presumably so that he could claim the US has a larger trade deficit than it actually does. Although given he basically pulled the formula out of his ass anyway I’m not sure why he bothered to fudge the numbers as well.
