Well the math really isn’t complicated.
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So the thinking must be:
If a country has a trade surplus with the US, that proves undeniably it must be cheating.
The higher the relative surplus, the more it must be cheating.
Our Tariffs go up in line with degree of cheating.
Either we‘ll root out cheating.
Or we‘ll get stinking rich from tariffs and can extend the greatest tax cut the world has ever seen to our deserving JC class. The US consumer will understand some sacrifice is necessary, anyway he will have forgotten about it by the time I run for my 3rd term..
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Well he said he would bring prices down, who knew he meant stock prices.
The only countries that He didn’t put tariffs on are Russia and North Korea. 
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Standard TIG sales pitch “we’re a victim”.
The objective, in a nutshell.
Yes, USian voters seem to have the memory of a gnat.
Steve
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Dear Andy,
I was about to start posting that Trump can not do basic maths here. Gee
He still does not have a clue about economics.
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To Whom It May Concern,
In 2024, the US goods and services trade with China totaled $758.4 billion, with exports at $195.5 billion and imports at $562.9 billion, resulting in a trade deficit of $367.4 billion for the US. China’s trade surplus with the world reached a record $990 billion, with exports at $3.58 trillion and imports at $2.59 trillion.
We need yet another explanation that is much further out there.
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I get up 3 times a night.
They used the data from the US Census Bureau from 2024.
China Trade Summary
U.S. total goods trade with China were an estimated $582.4 billion in 2024. U.S. goods exports to China in 2024 were $143.5 billion, down 2.9 percent ($4.2 billion) from 2023. U.S. goods imports from China in 2024 totaled $438.9 billion, up 2.8 percent ($12.1 billion) from 2023. The U.S. goods trade deficit with China was $295.4 billion in 2024, a 5.8 percent increase ($16.3 billion) over 2023.
Then they created a very impressive formula:
xi represents a country’s exports to the US, mi represents the country’s imports from the US (trade deficit). E represents price elasticity of import demand. The squiggle represents elasticity of prices with respect to tariffs.
When asked to explain it, the trade policy brain trust decided they couldn’t, and set E to a value of 4, and the squiggle to a value of .25, effectively cancelling each out.
What we’re left with is trade deficit divided by a country’s imports into the US. These baseline rates were then adjusted by half, or dropped to 10%, or whatever.
My guess is that reality was different. They started with an kindergartner level calculation to “balance trade”, then worked in some BS calculations that look impressive in order to fool all the doofuses.
When I think things couldn’t possibly get dumber, tomorrow comes with new and exciting idiocy.
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Thanks Bob, but during the president’s trade policy discussions it was called the squiggle.
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Estimate of trade price elasticity range up to 4.8, so they did take a value on the high end.
Abstract:
When countries change most favored nation (MFN) tariffs, partners that trade on MFN terms experience plausibly exogenous tariff changes. Using this variation, we estimate the trade elasticity at short and long horizons with local projections. We find that the elasticity of tariff-exclusive trade flows is −0.76 in the short run, and approximately −2 in the long run. Our long-run estimates are smaller than typical in the literature, and it takes 7 to10 years to converge to the long run, implying that (i) the welfare gains from trade are high and (ii) there are substantial convexities in the costs of adjusting exports.
DB2
Thanks for sharing! It looks you found one of the same articles referenced by the “trade experts” after they Googled “trade elasticity papers”.
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…and if s/he persists in not forgetting, then my “campaign staff” working the streets will skillfully remind them to… fuggedaboutit.
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Yup. I wanted to see where they were versus consensus as there are no one-armed economists.
DB2
Here are some quotes about the reciprocal tariffs from a couple of the cited economists:
Pujolas -
- “The way in which we calculate the tariffs is using a sophisticated quantitative model that needs to go through a supercomputer to speed up what the tariff rates are,” “I do not think that that’s what they have done.”
- “So all things combined, it makes me think that there are some discrepancies between what the administration has done and what our work recommends as optimal.”
Soderbery -
- “They pulled two numbers out of thin air that perfectly canceled each other out,”
Trade policy is complex. Economists use advanced math. Do you believe our tariff policy should be based on something a 5th grader could come up with?
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This reminds me of a joke I heard years ago. Here’s one version of it.
A geologist, physicist and an economist are marooned on a desert island with nothing to eat. A can of soup washes ashore. They ponder how to open it.
The geologist says, ‘Let’s smash it open with a rock.’
The physicist says, ‘Let’s heat it up and blow it open.’
The economist says, ‘No, no. You guys will lose most of the soup. Let’s just assume we have a can opener.’
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To be cliche: “you say that like it’s a bad thing” …
After a quote by some “expert” that says “you’re too stupid to understand”.
ralph
I think you’re mistaken. Experts are saying, “This is very stupid, there’s no point in trying to make sense of it.”
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Nope.
Here the quote and expert
Ie “we so smart cause we got a supercomputer, you so dumb you just couldn’t understand, so don’t question our math”.
Here’s a graphic that describes this expert’s supercomputer math:
https://www.researchgate.net/figure/Then-a-Miracle-Occurs-Copyrighted-artwork-by-Sydney-Harris-Inc-All-materials-used-with_fig2_302632920
If that link doesn’t work, Google “and then a miracle happens”.
ralph
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Again, you’re mistaken. The quote is from an economist that was cited by the administration in their explanation of how the they calculated their reciprocal tariffs. He had nothing to do with the policy. He’s explaining that his models are complex and they use supercomputers to arrive at their conclusions. He goes on to say…
Meaning that, it’s clear the administration’s stupid simple calculation did not draw on his research.
In other words…“Your tariff formula is dumb, please don’t use my research to justify it.”
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