Posted by Leary 4/5/2025
I assume that is similar to me being a computer company importing chips, a 25% tariff on microprocessors will make the imported cost of microprocessors go up by ~24% (because some really expensive ones don't get bought) but it would increase the price of the computers I build by ~5% because most of the computer isn't a microprocessor.
It is an exciting time to learn about the country of Lesotho.
In other words, Trump's equation thinks that import price will absorb (elasticity) the tariff's impact, but that's not true. It's passed on almost entirely (the 0.945 number, so 0.055 may be absorbed).
So it's using wrong numbers to justify the effective tariffs. IMO, I don't think Trump cares. I think the equation was a "straw-man".
The “reciprocal” formula does not even consider this. China can impose a 1000% tariff and the formula will not move :facepalm:
The Trump Administration ignores the services and only looks at goods. So the base is already wrong.
I wonder if the change in leftists is just a reaction to Trump who they didn't like because of his personality. Now everybody's making economic arguments which is nothing like what the older type of leftist would do.
Republicans weren't the antivaxxers - that was largely hippie type democrats - prior to 2020, and weren't really even until the government mandates, just to give one example. Hell, it isn't even an idea but look what happened to Elon Musk. Liberals loved him until he started publicly sharing some conservative ideas, which made them waffle a bit, and now they absolutely loathe him.
This is going to sound like peak HN head-up-own-assery, but I've come to realize that 90% of the population has basically no capacity for nuance, at least politically.
I mean, this one is just being reasonable. Liberals were for a person X as long as that person pretended to favor the same policies and ideologies. When that person turn out to be conservative, well actually far right political player, they changed opinion on the person. Both Trump and Musk dabbling in the democratic politics and then being rejected by them is a sign of more consistent politics of that side.
When liberals were antivaxxers, issue was not much political. And democrats and other liberals largely criticized these. Politically, liberal antivaxers were minority that lost the political fight in their own party. They were not putting in anti-vaccers into power.
They're a Trump position.
They have no basis in principle, ideology, or logic.
They are purely something he wants because he misunderstands what they are and do, and thinks that they will punish other countries more than they will punish the US.
If we look at his actions from this angle, could they make sense?
Step 2: become an emergency dictator "for the duration of the crisis"
Step 3: make sure the crisis never goes away, but it's not so bad that people would revolt
It's basically dictatorship 101. In this case the US happens to be the center of global economy, so a crisis in the US also causes a crisis elsewhere, but that's an irrelevant side effect. The only question is whether Americans will realize what's going on before it's too late.
I have no idea why you Americans are so naive about someone who staged a putsch to give up power voluntarily now that he's got it. You will be a russia style full on kleptocracy by the time he's done with you. And then his heirs will lord over you for generations (unless one of them fucks something up). Godspeed.
I'm not naive about the fact that Trump would like to stay in office after 2028 (he doesn't exactly keep it a secret), but the desire doesn't make him any good at it.
When Trump threatens to destroy law companies that sued him and gets submission because he has actual power to do it, that is "consolidating power". It does not matter whether people think he should have that power or not, he has it. And he is using it so that everyone is afraid to oppose him in the future. Or sue him.
When Trump fires prosecutors that prosecute criminal acts by him and his friends, he is consolidating power. When he hires loyalist and uses prosecution against his political opponents, ignoring unfavorable laws and judges, he is consolidating power. Because all of that makes sure that it does not matter what people think, they will shut up and wont oppose.
When Trump changes election laws so that students have it harder to vote, he is consolidating power. People who are likely to vote against him will vote less for practical reasons and their opinions wont matter.
> I'm not naive about the fact that Trump would like to stay in office after 2028 (he doesn't exactly keep it a secret), but the desire doesn't make him any good at it.
All he has to do is to harm those who oppose him, so there are less people opposing him. And to ignore the laws he finds inconvenient, which is something he is already doing.
Putin just stepped into the nest of ~unlimited executive power that was already made for him.
But you can't see any of this, when you're on the inside looking out - and you can't be certain of it when you're on the outside looking in.
Look up the military leaders of the USA. Secretary of Defense, Chairman of the Joint Chiefs of Staff, Service Chiefs (Army, Navy, Air Force, Marine Corps, Space Force) ... all appointed by Trump.
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...
1. The evisceration of American soft power will really diminish the direct and indirect harm the US intentionally and unintentionally causes. Just look at China, South Korea and Japan deciding to respond to tariffs together [1]. That is an absolutely astonishing event given fairly recent history. Future retellings of history will correct portray the US as the actual Evil Empire; and
2. All of these actions are doing a ton to break the myth of meritocracy. The people involved in this, at the highest levels, are clearly demonstrating just what complete and utter morons they are. This is why fascism flames out: valuing loyalty above all else results in an administration of sycophantic morons.
This is going to do untold economic harm in the interim but ironically it's accelerating the rise of China as a global power, despite the fact that this administration are China hawks and see these tariffs as a means reducing China's power, which it won't.
[1]: https://www.reuters.com/world/china-japan-south-korea-will-j...
> BEIJING, March 31 (Reuters) - China, Japan and South Korea agreed to jointly respond to U.S. tariffs, a social media account affiliated with Chinese state media said on Monday, an assertion Seoul called "somewhat exaggerated", while Tokyo said there was no such discussion.
We also end up consistently on the wrong side: apartheid South Africa, Pinochet's Chile, Saudi Arabia, Israel, the list goes on.
Russia? We enabled the looting of Russia after the collapse of the USSR that directly created Vladimir Putin.
North Korea? This continues a long trend of simply starving countries for the hell of it, just like Iraq [1], Venezuela and Cuba.
China? What's China done exactly? I'll tell you what: it singlehandedly lifted hundreds of millions of people out of extreme poverty in the 20th century. Remove China from the stats and poverty grew in the 20th century. China became an economic powerhouse while having a much fairer distribution of wealth than the US has had or currently has. And they continue to build infrastructure rather than minting a few more billionaires.
[1]: https://www.aljazeera.com/opinions/2022/3/25/lets-remember-m...
I could easily go on.
You're looking at the world with very..uh, anti red white and blue glasses.
If you don't believe that, then his policies are terrifyingly not confusing. If you believe his policies are primarily meant to benefit American oligarchs or Russia, his policies are even less confusing.
Withdrawing support for Ukraine and not putting tariffs on Russia, despite putting tariffs on uninhabited "Heard Island and McDonald Islands" is probably the least confused I've been since his inauguration. https://www.theguardian.com/us-news/2025/apr/03/donald-trump...
It will be fascinating to see what is going to happen with that purely mercenary army recruited from the poor when the money is worth nothing any more.
Assuming that Trump, Musk, and Putin each need something from one of each other. Assuming that the siloviki want to quietly rule Russia.
A mercenary uprising would be convenient cover for Putin to endure exile in, say, the Caribbean. Security by FSB, siloviki split up their rule across Russia, etc. Operating from Guyana, Putin could deprive ESA of access to the French Guiana spaceport, handing it over to Musk.
The entire Caribbean fell into 10% tariffs except for two: Guyana (38%) and Cuba (0%).
- He wants to choke them with tariffs (and now has leverage to get the rest of the world to join in).
- They want Greenland to defend the North
- He wants to onshore manufacturing as a strategic wartime capability
Once you understand this, his policies make sense.
And the whole business of putting tariffs on everywhere is so countries can't export from them to evade the tariffs.
So because of this he seems to think effects on markets will be a one time correction that's worth the cost (not to mention is probably shorting it to pieces)
> He wants to choke them with tariffs (and now has leverage to get the rest of the world to join in).
Like, how? You expect the countries to put tariff on Chine, risk to have tariffs put on them by both China and unpredictable USA? He is loosing leverage here rather then gaining it.
> They want Greenland to defend the North
Right now, Greenland sees America as the biggest threat to protect against. They even refused to talk to Vance on his visit.
> He wants to onshore manufacturing as a strategic wartime capability
That is inconsistent with tariffs on everything. If this was the goal, he would had targeted tariffs to ease manufacturing. It would exclude materials for example. It was NOT be calculated as ratio of trade deficit.
And this is also inconsistent with using tariffs as a leverage in negotiations which was your other point. This would require stability and companies being confident the policy wont change in the next few years. In reality, they dont know what will happen tomorrow.
They'll tie the defence umbrella to tariffs and good behaviour.
If they wanted to sell defense, threatening annexation of countries they are supposed to have current defensive arrangement with is inconsistent with that. Allying yourself with Russia is inconsistent with that too.
And above all, an attempt to use past help as a reason to make the other country your colony for materials extractions while trying to sell their parts to Russia ... makes you untrustworthy.
Greenland is not threatened by China right now, they are threatened by America.
Who buys American weaponry to fund American military industry when countries don't trust us?
Why would he create the grounds for civil unrest here, which would make decisive military action much harder?
How can we have leverage when other countries are dealing with an O(1) problem while we are dealing with O(N) harm to our economy?
Why abandon Ukraine, a country in a very similar position to Taiwan?
Why talk about ethnically cleansing Gaza, ceding the human rights high ground?
Even if we figured out manufacturing, wars are frequently won with technology, and those researches that fled Germany to get away from oppression are now fleeing America because colleges are robbing them of their dignity in expression and attempting to exploit them by taking the fruits of their labor, without the experiencing the "cost" of their own person-hood and individual beliefs.
China has the upper hand because USA has turned against all its allies and countries will favor trade deals with the country which is not tariffing them. China will form stronger trade coalitions with the Japan/Korea/Europe and leave America to cannibalize itself.
Also, this kind of ignores how dependent Russia is on _China_. If this were actually at Russia’s behest, China would hardly even be bothering with mirroring tariffs; it would just call Putin to heel.
Am I mildly amused to know someone somewhere had to manually remove Soviet Union (.su) from a list of countries to put a tarrif on? Absolutely.
For example, according to ISO 3166, Kosovo is not a country, but Antarctica is, which isn't particularly useful in real-world scenarios. Kosovo does have its own ccTLD (.xk, although it's supposed to be a temporary one) and were tariffed.
The reason I've mentioned Soviet Union in particular is that its domain is still active. You can go and buy .su right now, unlike say .yu (Yugoslavia), .dd (East Germany) or .cs (Czechoslovakia), which were deprecated.
AEI is just another church of Austrian economics--still burning incense for the ghost of Milton Friedman. If you told any of them, "Tariffs, or your mother dies in her sleep tonight.", they would reply in chorus, "Oh well, that's why I keep a picture to remember her by." If any of these people actually knew what they were talking about, they would be fabulously wealthy hedgies like Dalio or Simons, rather than "think-tank" shills.
It doesn't really matter if they analyze the nth-order effects correctly because there is enough wrong with these tariffs that the 1st order effects will be bad enough that the higher order effects won't matter.
Even if Trump is right that the US should not have a trade deficit it only makes sense to apply that to US trade a whole, not to trade with each individual country.
If you apply it to each country independently then you cannot trade with a country that has something you need but doesn't need anything from you. That would exclude circular trade (US buys from A, A buys from B, B buys from the US) for example.