It's utter incompetence and laziness. But when you vote in lazy incompetence, then that's what you get.
There's a list of real tariffs for various countries here https://x.com/ianbremmer/status/1908609257756336239
The circular situation seems not so common but countries like Camboidia don't import much from the US because the people there don't have much money, so the Trump formula makes their 'effective rate' 97% whereas their actual tariffs are 7.9%. The net effect is to hammer the poorest countries.
Ironically the Cambodians don't have much money to buy US stuff because of terrible governments that got in partly as a result of the US destabilizing things by bombing the country. They don't seem to have much luck with the US.
Laos, Cambodia, Vietnam, Korea, El Salvador, chile, Colombia, Iran and on and on.
Now it seems there is just one country benefiting from their relationship to the States…
he does have a bunch of crypto pump and dumpers as advisors.
So say, ACME is trading at 110. I can buy the right to sell you ACME at 100. You say ok because it's at 110.
But then ACME crashes to 50.
I buy it at 50 and you are on the hook to buy it from me at 100.
All the numbers on what a country is supposedly charging america appear to be a complete fabrication so we're forced to find other motivation for setting the numbers the way they did.
https://arstechnica.com/tech-policy/2025/04/critics-suspect-...
https://www.theguardian.com/australia-news/2025/apr/04/revea...
I have three theories, based this article.
1. The administration used an LLM on certain data and it incorrectly conflated the countries.
2. Certain companies listed regions of export to avoid customs, duties, or for other reasons and it now indirectly got exposed. The article alludes to this without saying so?
3. The administration listed what seemed like inconsequential regions for the purpose of preventing Australia, for this example, of just saying it was exported from Norfolk Islands to dodge tariffs. Although, this is giving the administration way too much credit and if they are reading this don’t steal this as reason. :-)
There are multiple of these explanations and none od them is consistent with actual decisions.
https://xcancel.com/JamesSurowiecki/status/19075591892341969...
(when describing the model) Let ε<0 represent the elasticity of imports with respect to import prices...
(when implementing the model) The price elasticity of import demand, ε, was set at 4.
4 is less than 0, right? Right?!?
> The recent experience with U.S. tariffs on China has demonstrated that tariff passthrough to retail prices was low (Cavallo et al, 2021).
The line that says "sure, tariffs won't cost consumers _that_ much", and they don't even have a bibliographic entry for Cavallo et al. 2021.
I debated doing that. I wish I had, I would have made a bit of money in the last few days.
The details weren't public. You can stop feeling being bad about yourself.
I mean, I don't doubt that it's true, but it seems more like an opportunity to make some money on the side than a reason to do it in the first place.
I also feel that this is a ripping the band aid off approach to destroying globalism. The Biden administration was already toning down the globalism of Peter Ziehan was correct, as we saw with their tepid responses to the red sea fiasco but now Trump has upped the attacks on the houthis too so I'm not quite sure what to think.
Anyone who's trying to make arguments based on the formula itself is the dog being wagged.
Martinique is a region and department of France—and administrative subdivision of the same type as those in the French mainland, differing only in that the the top two levels of subdivision (region and department) are coextensive rather than nested in Martinique and the other overseas region/departments.
More 'funny': Diego Garcia (officially British Indian Ocean Territory).
An island in the Indian Ocean whose only inhabitants are UK and US military personnel.
* https://en.wikipedia.org/wiki/Diego_Garcia
* https://www.cnbc.com/2025/04/03/5-bizarre-locations-hit-by-t...
It might actually be ha-ha funny if this wasn't creating havoc on international commerce and people's lives.
I found an article[1] but perhaps someone here knows more or is there in person.
> Lesotho exported $237m of goods last year to the US and imported $2.8m. Agoa[2], which has allowed tariff-free access to the US market for thousands of product types since 2000, created a thriving garment industry, accounting for about 20% of GDP.
> There are about 30,000 garment workers in Lesotho, mostly women, with 12,000 making clothes for US brands including Levi’s, Calvin Klein and Walmart in Chinese- and Taiwanese-owned factories.
> “(…) If we lose our jobs here, I’m almost certain that many of us will end up sleeping on empty stomachs.”
[1]: https://www.theguardian.com/global-development/2025/apr/04/l...
[2]: https://en.wikipedia.org/wiki/African_Growth_and_Opportunity...
A sane tariff policy would be set up to penalize these very low wage exporters to give competitive advantage to exporters and local producers with higher wages but also to incentivize higher wages in a way that set rates make producers more profitable if they paid workers more (and likewise other human development and environmental etc issues)
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.
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...
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.
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?
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.
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.
There is a 2024 paper (40 pages) by Stephen Miran, chair of the Council of Economic Advisers, https://news.ycombinator.com/item?id=43589350
The root of the economic imbalances lies in persistent dollar overvaluation that prevents the balancing of international trade, and this overvaluation is driven by inelastic demand for reserve assets. As global GDP grows, it becomes increasingly burdensome for the United States to finance the provision of reserve assets and the defense umbrella, as the manufacturing and tradeable sectors bear the brunt of the costs... Tariffs provide revenue, and if offset by currency adjustments, present minimal inflationary or otherwise adverse side effects.
> Miran.. points to Trump’s application of tariffs on China in 2018-2019, which he argues “passed with little discernible macroeconomic consequence.” He adds that during that time the U.S. dollar rose to offset the macroeconomic impact of the tariffs and resulted in significant revenue for the U.S. Treasury.. “The effective tariff rate on Chinese imports increased by 17.9 percentage points from the start of the trade war in 2018 to the maximum tariff rate in 2019,” the report said. “As the financial markets digested the news, the Chinese renminbi depreciated against the dollar over this period by 13.7 per cent, so that the after-tariff USD import price rose by 4.1 per cent.”
Next step is currency devaluation. Think I'm going to sell all my US stocks despite the recent battering as they're likely to fall further.
A sudden shock to tariff rates of the size proposed can result in financial market volatility. ... A second Trump Administration is likely therefore take steps to ensure large structural changes to the international tax code occur in ways that are minimally disruptive to markets and the economy
While President Trump has proposed a 10% tariff on the world as a whole, such a tariff is unlikely to be uniform across countries.
Oof.
Once tariffs begin increasing beyond 20% (on a broad, effective basis), they become welfare-reducing
Uh...
How can the U.S. get trading and security partners to agree to such a deal? First, there is the stick of tariffs. Second, there is the carrot of the defense umbrella and the risk of losing it.
Ukraine, Greenland, Canada... They've created so much doubt over the defense umbrella that they've really hurt their position here.
1.) Shock the market into dropping several hundred points on the S&P and Nasdaq indices, thereby making quite a bit of money on the way down and then back up again. and
2.) Lower tariffs in exchange for patronage from countries or specific businesses that want a port opened in this new trade firewall.
Donny reneged on that.
Other countries know that Donny is not trustworthy when it comes to deals. He will go back on them at any time.
You can't negotiate with a pigeon.
https://english.kyodonews.net/news/2025/02/b4067f888d9e-japa...
it's just incompetence
real estate allows a lot of bullshit from a leader like this because they're not going to go in and give orders to the structural engineers or the electricians that can actually cause huge problems, the only thing a bullshit artist is going to influence are the outward appearances which are easy and you can't do so wrong that the building falls over. the thin facade can really just be whatever and you can always screw over a new set of suppliers or go bankrupt again and keep going
now the lifelong real estate scammer is taking that facade bullshit attitude which basically couldn't go wrong and directing towards the very impactful machinery of the global economy expecting the same kind of bluster to be the same kind of effective
it's not emotional reactions it's just stupidity, people who didn't understand things voted for the guy that puts on a much better show
and didn't vote for the people who put on a terrible show, displayed zero hutzpah, and have the attitude of "i know better than you" and "i told you so" and make no effort to hide it
The tariffs are for forcing the entire world to renegotiate anything that he is interested in. And that plan will work. They will ALL negotiate, with him holding the upper hand.
PS: Many of the replies suggest that countries can achieve independence of US companies and the US Dollar. While that is possible they forget a key weakness of democracies. Politicians are elected based on short-term benefits and avoidance of suffering. All those required actions to reach independence require serious long-term efforts that detrimentally impact the comfort of the respective voting population at least short-term. That's why those adjustments probably won't happen. Trump knows that and takes advantage of it. Countries not governed by a democratic system are usually led by an elite who'll be indifferent of pretty much anything we are debating here - they just want to obtain more power and wealth. And they'll be achieving this easier when they cooperate with who is factually the most powerful man on the planet.
Trump’s ship of fools is tossing the US to the sidelines of the global trade, in particular due to his inability to work with anyone else. EU is rearming, they won’t need “america’s protection”. Latin America (with the only exception being Argentina) is stronger than ever as a trade block, and getting courted by EU and China. Africa is aligning with China for a decade. India is going up the ladder, from US’s cheap labor center to a country producing goods for their own consumption. Even Israel seems completely uninterested in joining the “green list”.
Everyone will find more reliable trade partners, and the American people will be left hanging with this supposed “upper hand” trump supporters dream he has
Okay, let's have a look ... well, this statistic doesn't back up your claim:
https://tradingeconomics.com/united-states/exports/china
> Trump’s ship of fools
Which is actually part of his strategy. You need fools that commit outrageous claims, threats and actions. Then he can play the good cop when it makes sense and just fire the fool. That is basically applied game theory on a meta- and psychological level.
> Everyone will find more reliable trade partners
No, they won't and everybody knows that.
All those supposed "people" are like your celebrities who promised to leave the country if Trump gets elected. Nobody left.
This is also a good example of a bad strategy from a game theoretic perspective.
They want X and threaten: if I don't get X then I'll do Y which is going to be bad for you and me. They don't get X and think: well, what's the point of sticking to my threat if I lost anyway. And that's a bluff. Trump would do X nonetheless and by that prove he's willing to suffer himself just to make you suffer as well. This is going to be remembered next time he makes a threat.
All of those other things, minus geography are influenced by the terrifs. Terrifs make economic incentives to invest in America, for America to gain comparative advantages, etc.