How to calculate Trumps tariff plan.

[Byebyebtc]

This article by the BBC dissects the mathematics used to calculate Trump’s “reciprocal tariffs” revealed during his Liberation Day announcement. The administration said it was based off multiple factors such as existing tariffs, trade barriers, and monetary policy. However, it appears the administration used a much simpler method: The value of exports divided by the value of imports divided by 2. So tariffs appear to be based only on the United States’ trade deficit. If the U.S. had a trade surplus, such as with the United Kingdom, then a base tariff of 10% was applied. Okay, to be honest I usually try to be academic and dispassionate in my personal response, but this is just plain stupid. Tariffs, if used properly, could help grow American manufacturing but again to be blunt, this ain’t it. I’ve never fully bought in that Trump is evil, but I do believe he is an egomaniacal moron. There’s even indications that his cabinet lies to him regularly because any modicum of bad news will get you shut out. But I’m getting sidetracked. In general, what are your thoughts? Can we expect to see a roll-back on these tariffs? What may the next few months look like?

Main source of information is here: How were Donald Trump’s tariffs calculated?

[franky1]

This article by the BBC dissects the mathematics used to calculate Trump’s “reciprocal tariffs” revealed during his Liberation Day announcement. The administration said it was based off multiple factors such as existing tariffs, trade barriers, and monetary policy. However, it appears the administration used a much simpler method: The value of exports divided by the value of imports divided by 2. So tariffs appear to be based only on the United States’ trade deficit. If the U.S. had a trade surplus, such as with the United Kingdom, then a base tariff of 10% was applied. Okay, to be honest I usually try to be academic and dispassionate in my personal response, but this is just plain stupid. Tariffs, if used properly, could help grow American manufacturing but again to be blunt, this ain’t it. I’ve never fully bought in that Trump is evil, but I do believe he is an egomaniacal moron. There’s even indications that his cabinet lies to him regularly because any modicum of bad news will get you shut out. But I’m getting sidetracked. In general, what are your thoughts? Can we expect to see a roll-back on these tariffs? What may the next few months look like?

Main source of information is here: How were Donald Trump’s tariffs calculated?

you have done the maths incorrectly by suggesting 'divide by 2' within the formulae... the formulae actually RESULTS to get the answer of 2
you got things wrong

its actually:       imports - exports
                        ______________  =2
                              imports
yep it equals 2 (not divides by 2 within the formulae part)

by which, taking the result of formulae(2) then is used separately to this formulae.. as the discount trump will offer.. once separately calculating a countries tariff

if the deficits of all countries combined were really bad, like formulae answer: 4..
then the set discount needs to be more to incentivise a change of goods flow direction, so discount would be 4x lower than a countries rate

the math is based on taking all country's deficits against america and the result is: average global number of 2. even the USTR site explainer says this
this average global number 2.. is the the discount rate

the formulae has nothing to do with setting china as 67% for instance but saying most countries will get a /2 discount factor
the whole "why china 67" has to do with different tariffs, fee's and stuff.
some countries like the UK have a MFN rate (Most Favoured Nation) by which tariffs are 0% or super low
where as non MFN rate is higher for countries not grouped in good diplomatic agreement(PTNR status)

other things like VAT(sales tax) where by countries in friendly agreement allow other countries to get refund of VAT on wholesale. where as other less friendly nations dont refund VAT(sales tax) at customs. then there are access agreements between countries where some countries can ship to freeports/freetrade zones.. where as others cant. which affect the tariff rate. then there are other little other fee's and duties.

china is set at 67% because of all the fee's, duties, non-mfn rates and such all added up.. which is why china are alot higher than say the UK, where the UK have alot of smaller amounts due to preferential treatment, using Mfn rates, allowing VAT refunds at customs.. and such.. so the UKs rate is below 20 so ends up being set at the base rate of 10% min tariff

the "china 67%" is not some random made up number.. nor a number based on the media published formulae(which is just about setting discount rate overall)
the 67% is a combination of all tariff fee's and rates for a non friendly non preferential country.

if you look into the MFN and non-MFN and then look at the vat and other stuff, it all becomes clearer that trump along with his own economists and even chinese economists and even the world trade organisation do make sense of why 67% they done the math of calculating it all out.. but media just cant work it out so make it look like its a rando number because they cant admit they are not good at investigative journalism and would rather be click bait fear media

but the answer does exist. you just have to add up the non preferential rate, the vat the non MFN rate and other small add on rates which do infact get to 67%

[STT]

Whatever the figures, I think the whole strategy will only succeed if Trump does actually do a deal with someone sooner not later, upsetting everyone simultaneously seems a bad idea to me personally.     After WW2 USA was in the majority of world trade I believe, it was that important but its no longer true.  The origins of the USA dollar as the global reserve currency stems from that period after WW2 and so now  he could overplay his hand.

If Trump doesn't make the deal then others will formulate world trade and likely the world reserve currency, he will have changed matters but not likely for the benefit of USA.   Dollar is in demand because the system is biased towards the US in a variety of ways, I think the bias on purpose to reinforce the system with a strong center; USA is the largest holder of gold by far without alot of the trade as said above but over time alot already changed .   Upset too much and it could just go a completely different way, I know China wants an asia bias with themselves at the center of world trade etc.

[coinhelper]

I think he needs to start subsidising American industry instead. He can do both at once but if the government are not actively investing in industry and other methods to mitigate with the tariffs (especially with the money raised) it's a foolish endeavour.

I saw people on Tiktok and other social media saying AI chatbots (chatgpt) was the actual thing that came up with the reciprocal tariff formula.

Also, the UK doesn't have a trade deficit with the US. That's likely also true for the Taliban that got a 10% tariff, the formula just probably added a floor so no one (but Russia of course) scored zero.

[henry_of_skalitz]

I think he needs to start subsidising American industry instead. He can do both at once but if the government are not actively investing in industry and other methods to mitigate with the tariffs (especially with the money raised) it's a foolish endeavour.

I saw people on Tiktok and other social media saying AI chatbots (chatgpt) was the actual thing that came up with the reciprocal tariff formula.

Also, the UK doesn't have a trade deficit with the US. That's likely also true for the Taliban that got a 10% tariff, the formula just probably added a floor so no one (but Russia of course) scored zero.

Who would want to go into the industry if there is an option to be in a cozy office with a same wage or even a bigger one nowadays?

[coinhelper]

Who would want to go into the industry if there is an option to be in a cozy office with a same wage or even a bigger one nowadays?

I know a lot of people that work in offices who would appreciate working in open spaces or doing something more skilled than what most jobs are now - data input and a bit of common logic.

A lot of arts get devalued because people do them as hobbies and that's still a thing being produced but if it were subsidised it could be done more and would see a higher level of interest in people learning the skill.

Like food security/national food strategies, skill conservation is something that helps a country out particularly during wars or crises as you can make individuals easier to train up. A lot of employers dislike individuals from taking on second jobs or side hustles but it can make the economy (and them) more stable overall if they do..

[AVE5]

Can we expect to see a roll-back on these tariffs? What may the next few months look like?

Based on the Trump's view on the US economy, so he think he can restore it my increments of tarrif while getting the people exploited  it course and think it's go gonna workout good for long time? Of course not. There must be garbages accompanied to it which might worsen the situation because other potential countries too will apply same strategy. I only pity for average and vulnerable citizens because they can't get fit in with the recession coming ahead.

[aoluain]

There has been some talk here in Europe about Trumps tariff's of 20% and how
a simple formula was used by him and his cabinet but its becoming clear that if
the more robust and comprehensive formula was used the actual percentage
tariff would be 39% - we can count ourselves a bit lucky that the announcement on
"Liberation Day" was only 20% but yea we dont know where we are headed.

The country with the most Nobel Prize-winners in economics is calculating “protectionism” as the amount of exports to the US minus the amount of imports divided by that amount of exports. For the EU, we know that the US exports $370 billion but imports $605 billion, meaning a trade deficit of $235 billion. If you divide that $235 billion by $605 billion you get a figure of .39, which is where the magic 39 per cent comes from.

https://www.davidmcwilliams.ie/post/trump-is-basing-entire-us-trade-policy-on-nonsense-economic

[el kaka22]

To be fair, you don't unless you owned a business that is impacted by it personally. I personally don't ,because I am not American, so it doesn't matter to me, and I am not selling anything to America neither, so overall it doesn't matter to me at all. While it may feel like it is a big dela, it is not a big deal at all.

This is why I try to avoid it as much as I can, and not really deal with anything like this for a long time. Because if I cared enough and tried to calculate the loss of money for someone else that doesn't matter to me, I would gain no benefit. One benefit for me is that Americans won't be able to sell much, so it would mean what I sell could be valued a lot higher on the long run, and China may drop prices to get back on profit, so that profits me too.