Comment by dragonwriter
8 days ago
> Someone figured out that the new tariffs are just our trade deficit with that country divided by the country's exports.
Note that the White House has both (1) officially denied this, (2) provided the formula they assert was used as support for that denial; but the formula is exactly what they are denying but with two additional globally-constant elasticity factors in the divisor, however, those elasticity factors are 4 and 0.25, so...
Wow I really just read a .gov website trying to obscure a formula by multiplying 0.25 by 4.
I'm stunned.
https://ustr.gov/issue-areas/reciprocal-tariff-calculations
"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., 2023), but estimates of the elasticity vary. To be conservative, studies that find higher elasticities near 3-4 (e.g., Broda and Weinstein 2006; Simonovska and Waugh 2014; Soderbery 2018) were drawn on. The elasticity of import prices with respect to tariffs, φ, is 0.25."
In practice I believe at least 90% of Americans can’t figure out what that formula actually means; but if they drop the epsilon phi bullshit only 70% can’t figure it out. So it’s pretty effective obfuscation after all.
"Assuming that offsetting exchange rate and general equilibrium effects are small enough to be ignored"
Yes, let's assume the world is constant and changes are made in isolation.
What's the laden velocity of a spherical import with no air resistance?
1 reply →
Thank you for finding this. It's extremely valuable for those of us who are trying to make sense of the tariffs.
This is the same president that took a sharpie to a map, to show the incorrect path of a storm, because he could not admit being wrong or making a mistake.
These people are either malicious or incompetent. That's been the case for every single day of the decade-ish that Trump has been foisted upon us.
I've seen people use "sanewashing" to refer to the type of comment you're replying to, there's no sane explanation but people try to come up with one because the world doesn't make sense otherwise
I think often trump's policies are rooted in some sort of idea that is perhaps controversial but at least not totally insane, and then implemented in the most boneheaded way possible.
E.g. one explanation given for these trade policies is that trump sees a war with china down the line and is worried that china has tons of factories that could be converted to make ammunition while usa does not.
If so, there is at least some logic to the base idea, but the implementation is crazy, probably not going to work that effectively, and going to piss off all amrrica's allies which would be bad if WW3 is really on the horizon.
1. US will never outproduce China in ammunition
2. Alienating allies won't help the US produce ammunition
1 reply →
You're giving him too much credit.
Trump has always liked tariffs [alas, I can't find the source for this pre-presidency, its been blown out by current events]. He thinks trade is a zero sum game, and thinks that someone else set up the petro-dollar system.
Trump has consistently and reiliably always cowered away from war. Using other means to stop it (see russia, NK, China, Iran). Yes I hear the "we're going to invade x, y and z" but they never acutally came to anything (is that because of his advisors?)
Trump doesn't think about future capacity, only future pride. Does this change "make american stronger, and other weaker" is pretty much the only calculus that he's doing.
Trump's thinking is roughly as following:
"Why do we have taxes when we can use tariffs to raise cash and bring power back?"
"Why don't they buy from us?"(china/rest of asia)
"why are we spending money on them, when we don't get any money back? They are weak."(NATO)
"Why are we punishing russia, they are offering deals" (Putin offering cash deals)
There is no 4d chess. Its just a man who's pretty far gone, shitting out edicts to idiots willing to implement them.
6 replies →
It is the logic of schoolchildren. It is the simplistic logic of a teenager discovering Ayn Rand's wikipedia entry. (Grover Norquits came up with his tax pledge while in highschool.) The world is more complicated than any econ 099 exam.
The US are never going into a direct war with China, and China is never going into a direct war with the US. This is M.A.D in action.
At most we might see a proxy war over Taiwan (i.e. the US supporting and arming Taiwan, with sanctions against the PRC). The risk would then be a widespread disruption of global trade, at which point the US would not want to be dependent on the Chinese economy or factories in any way.
There is no logic to these things. This is the emperors new clothes, over and over again.
The proximate cause for these tariffs is not some future event. This is post fact rationalization.
The proximate cause is still the ongoing “information” war which determines the perceived reality that is litigated in elections.
Earlier politicians played theater, acting as if the red meat being fed to voters was real on TV, but dealing with reality as need be when it came to decision making.
This was a betrayal of voters, who saw their election efforts result in legislators who didnt do what they said.
Trump does what he says. He believes WWE is real, and acts as if it is. His base believes it is real, and now reality is crashing with the fiction.
The fiction will prevail, because his party has also been working to build the power to enact their will.
Everyone sees logic here, the same way that everyone saw the emperors clothes. The alternative is illogical.
This is the reason potential reasons “we dont know” have to be postulated (war / China can make more ammunition)
How will they project power into the Asia Pacific now they have tariffed their allies and probably forgotten about AUKUS?
I like this take a lot. I also think that America competing on manufacturing is obviously never going to happen.
9 replies →
>Trump sees a war with china down the line
So is destroying diplomatic relations with all their allies and trying to force ceding of power in central Europe to a former enemy who is allied to China?
Go on with ya.
He's a prick saving himself from prison whilst being willingly used to establish an oligarchic fascist state from the former USA.
4 replies →
[flagged]
8 replies →
Paper backing ggm's take:
https://news.ycombinator.com/item?id=43350553 https://news.ycombinator.com/item?id=43561808
Just so pple get the credit (even if they appear to be not so sane)
It makes perfect sense. You have a narcissistic asshole in the White House who got elected because the Democratic Party fumbled the ball.
I wouldn't put 100% of the blame on the Democrats, here in Australia we are frequently voting for the least worst option not the best, and I'm not sure how the Democrats weren't the least worst option when compared to the other option
but for some reason a whole heap of people decided to stay home this time and this is the result, hope they still feel happy with their decision
2 replies →
> You have a narcissistic asshole in the White House who got elected because the Democratic Party fumbled the ball.
It don't want to sound too persnickety, but there is always at least one losing side in an election. It doesn't have to mean they dropped the ball, it could just mean people preferred the other option. Hindsight bias is wonderful, but you have no idea what would have happened if they'd run with a different agenda, they may have had a worse result.
3 replies →
Some corrupt members of Congress and the judiciary deserve some of the blame.
[flagged]
I don't think half the population drafted this policy, so I could easily think the specific construction of the policy is insane without believing half the country is.
3 replies →
There's been some reporting that even die hard Trump supporters don't believe a lot of what he says. This gives them the ability to pick and choose what they believe and allowed him to appeal to a larger group.
How someone would vote for someone they know is lying is beyond my comprehension, but here we are.
It is insane and they are insane.
https://nitter.net/KushDesai47/status/1907618136444067901
Because Trump won the vote, you believe that half the population understands and supports his every action. That doesn't follow. His shit still stinks. Pretty sure The Right now have to say how sweet it smells.
1 reply →
A large portion of the base, is aghast at his actions, until someone on the news comes up with the defensive talking points.
THIS is sanewashing.
People dont have to be insane to do this, they just have to listen to their trusted news sources.
Sometimes something does not make sense because we don't see or understand the big picture and what people are trying to achieve, and thus it literally does not "make sense".
Trump is neither stupid nor insane and he will have access to many very smart people, too. Based on that the reasonable assumption is that they are trying to achieve a well-defined objective and have set a plan in motion to do so.
The "game" is thus to figure it out. @ggm's comment above is one possibility.
There are two issues with this thinking:
1. It is authoritarian. Democratically elected leader's duty is to present the policies he plans to implement so that voters can decide if they want them implemented.
2. It is based on the "4D chess" myth - that the leader is way smarter than the rest and is capable of outsmarting other countries. The history shows that it is never true. The leaders are normal people. And the institutions are as good as the founding principles that are honored by them.
5 replies →
1) heads of state can in fact be incredibly incompetent 2) the goal could entirely be 'stay in power' (which can also be implemented incompetently!)
The UK for a good few years had a government which had both these attributes. They were only interested in policies which would appeal to their base, but eventually even those soured on them because the policies were implemented so badly.
"Very smart people"
https://nitter.net/KushDesai47/status/1907618136444067901
Occam’s razor is specifically a counter to this.
The simplest solution is the right one. You are projecting intelligence, because you are used to.
This is AFTER the US government has roundly fired thousands of their experts and workforce, AND has just told everyone of its intelligence and army rank and file that there are no repercussions for a massive dereliction of duty.
AND IT IS ONLY APRIL.
4 replies →
for reference, the Deputy White House Press Secretary's tweet (providing evidence of (2): https://x.com/KushDesai47/status/1907618136444067901
It also proves (1), since it is a response (QRT, rather than a comment) to a tweet describing the trade deficit/exports approach, and starts with "No we literally calculated tariff and non tariff barriers.", and then presents the formula proving (2).
That formula just simplifies to trade_deficit/2*total_imports per country. It doesn't disprove anything it just looks fancier but the two extra terms are constants that simplify to 2. If you do the math it lines up for every country that didn't get the default 10% rate.
https://imgur.com/a/jBTiz7T
What’s QRT?
4 replies →
'Excuse me, we used Greek symbols to calculate this! Checkmate, libs!'
Just dont tell them about the arabic numerals. I dont want to buy a new calculator. Not under these tarrifs.
> arabic numerals
Soon to be "Numerals of America"
2 replies →
I’m afraid they’ll be learning about reverse Polish notation.
[flagged]
It really smacks of an "I am very smart" attempt.
wait seriously? can you provide a source? That is some serious denial of reality by the administration
https://ustr.gov/issue-areas/reciprocal-tariff-calculations
https://x.com/KushDesai47/status/1907618136444067901