Trade War 2025 - You get tariffs and you get tariffs, tariffs for everyone!

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PrimeRadiant said:
I am baffled as to how he expects to keep the petro-dollar while eliminating the trade deficit. To have the petro dollar, the US needs a capital account surplus, and this is only possible if the USA is running a trade deficit.
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Exactly. And most of that deficit is towards us too as we establish our line of credit this way.
 
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Inspector Rex said:
Assuming what I've read, it was actually a simple linear formula
tariff = (x - m)/m.

Where x - American exports to a country, and m - imports. Yeaaaaaaaah.

UPD:
Actually, it's a bit more complex:
tariff = (x - m)/(a*b*m)
a - import elasticity (which is arbitrarily set to 4 for every country)
b - transfer of tariffs to import prices for the national economy (which was arbitrarily set to 0.25)

a*b = 1; so we're back to the first formula. My bet is that some autistic tech bro came up with this.

I mean, I hate neolibs with their "evidance-based policies" that are often detached from real world, but this is just retarded.
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Hear me out on this: I don’t think the number actually matters that much. All that matters is that there is some tariff and that it’s large enough to hurt, and that there is incentive to reduce the ‘problem’ (in this case, trade deficit). The formula used here fulfills that requirement. Sometimes simplicity is the best option.

So why does that work? Well for one, you save a tremendous amount of time and money on not needing to collect a huge amount of market data for all these countries. Secondly, even if you did analyze all that data, it wouldn’t magically give you a single percentage for all imports of all goods for that country, because all those goods are wildly different.

You can think of it as being a huge collection of random variables. In the end, it doesn’t matter what they do because integrating them all together is just going to give you a normal distribution anyway. That is, using a huge collection of unrelated or tangentially related evidence to synthesize a single number is an exercise of futility.

As another point, markets are self-correcting. They are going to behave a certain way regardless of how much you fuck with them. This is the thesis of The Wealth of Nations. As long as the tariffs are not an overwhelming amount of the price (e.g. >50%), suppliers will have enough flexibility in price setting and sourcing to make decisions for their own benefit. That is, even if the percentage is suboptimal, the market itself will optimize around the value to make the most out of it.

Lastly, the formula incentivizes other countries towards reducing the trade deficits as a direct consequence of the formula definition itself, and it’s easy to understand that. It’s not opaque.

Based on these three points, it’s my opinion that this formula is actually no worse than trying to use a huge sample set of data to come up with a single number instead.
 
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Gunter x Gunter said:
So what now, Global recession or is the world gonna band together and try to circumvent it without the americans.
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Congress has always had the authority to overrule tariffs, and his executive orders ironically could be challenged under the Major Questions Doctrine (which overturned Biden's student loan forgiveness) because of their economic impact.
 
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Frederica Bernkastel said:
Congress has always had the authority to overrule tariffs, and his executive orders ironically could be challenged under the Major Questions Doctrine (which overturned Biden's student loan forgiveness) because of their economic impact.
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They won't be however. The house and senate is republican controlled. Trump is gonna do what he wants. And it's gonna be peak.
 
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George Lucas said:
that there is incentive to reduce the ‘problem’ (in this case, trade deficit).
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Except there isn't an incentive. In no world tariffs will force businesses to import more American stuff. Can you imagine a politician supressing some local manufacturers, and forcing hand-held US-centered trade deals on others just so another manufacturer (MAYBE) has an easier time to enter US market?

What will happen is that an average non-American Joe is going to face a recession, while his American counterpart is going to be milked by his billionaire compatriots in a cornered market.
 
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Major von der Westfront said:
Exactly. And most of that deficit is towards us too as we establish our line of credit this way.
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Its the Triffin Dilemma. The reserve currency needs to provide currency to supply the demand. This can only be done by running a deficit. The orange retard has declared he will punish countries from moving off the dollar, while trying to run a surplus, guaranteeing that countries will be forced to move off the dollar.
 
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Inspector Rex said:
Except there isn't an incentive. In no world tariffs will force businesses to import more American stuff. Can you imagine a politician supressing some local manufacturers, and forcing hand-held US-centered trade deals on others just so another manufacturer (MAYBE) has an easier time to enter US market?

What will happen is that an average non-American Joe is going to face a recession, while his American counterpart is going to be milked by his billionaire compatriots in a cornered market.
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Okay now you're just being a disingenuous faggot. What you're saying is solely based on your own opinion on policy and has nothing to with the formula which is what my post is referring to, which is directly based on trade deficit. You reduce the trade deficit, you reduce the output. It's fucking math. Whether it's viable for a country to impact its own trade deficit is a separate point of discussion.
 
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greatUncleShitHeel said:
I dunno, this seems pretty funny and people I hate/are a net drain on humanity seem to be panicking about it so I don't really care. Plus my wife was actually trying to learn what a tariff was yesterday, and looking at some basics on economics so thats cool.
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It's probably not going to be hilarious in the way you think but yeah.
 
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Falcos_Commisar said:
SUFFER TEMU AND SHEIN TRASH

Make the Chinese and their plastic bull shit suffer. May the boomer line crash. This is exactly what I voted for. Burn the current system and fuck the other countries.
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Now that’s based. I hope the boomers suffer. Covid was a massive disappointment in that regard.
 
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I understand his core motivation was to bring down the national debt, whilst spiking the hot potato that is MEDICAID and Social Security. No president, especially a Republican, wants to scrap it, but honestly, Medicaid just needs to be curbstomped. The US has never known true austerity, but it will be brutal. You need to pick nature over nurture now else the US will lose its place in the sun.
 
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