Trump 2.0

[jimbob]

0% on Russia and Belarus

20% on Poland

10% on Heard and MacDonald islands. Which have a significant population... Of penguins

[dyqik]

0% on Russia and Belarus

20% on Poland

10% on Heard and MacDonald islands. Which have a significant population... Of penguins

The White House has confirmed that the formula used is 10%, or (abs(imports-exports)/imports) / 2, which ever is greater. Applied to every country on the Wikipedia list of countries and territories.

Nothing to do with retaliation against tariffs, but retaliation against having to pay for stuff you buy (or having to hand over the goods when you sell something)

[jimbob]

0% on Russia and Belarus

20% on Poland

10% on Heard and MacDonald islands. Which have a significant population... Of penguins

The White House has confirmed that the formula used is 10%, or (abs(imports-exports)/imports) / 2, which ever is greater. Applied to every country on the Wikipedia list of countries and territories.

Nothing to do with retaliation against tariffs, but retaliation against having to pay for stuff you buy (or having to hand over the goods when you sell something)

And that is the formula one gets if one asks ChatGPT the easiest way to implement tariffs

[jimbob]

https://x.com/krishnanrohit/status/1907587352157106292

[dyqik]

The tariff list does recognize the sovereignty of Taiwan though.

[IvanV]

The Federal government's deficit is about $1800 bn on a budget of $6750bn. Which is an interesting place to start, because the DOGE's efficiency savings are saving not much more than a fart in comparison to that, and aren't going to fund the massive tax reductions Trump wants to hand out to rich people. These tariffs are going to bring in a loooot more money than the Muskrat can. This is in effect a tax increase, to pay for a tax reduction elsewhere.

It is also an interesting place to start, because trade deficits are mainly caused by fiscal imbalances, not the comparative state of production in different countries. You add up the government's own fiscal deficit and also the savings/investment balance of the population, and that adds up to how much money is being pumped into the economy. That has to go somewhere - and internal trade won't make it go away. So it sucks in imports. Chinese people save a lot of money because they know the government won't look after them very much when they are old or ill. German people also save a lot of money. US people, despite being better off, and living in a society with relatively poor social safety nets in comparison to UK and western Europe, don't save very much. Guess who has trade deficits and who has trade surpluses.

It's also worth reminding ourselves that the wealthier parts of the world are much more into production of services, and tend to have trade surpluses in services. The UK has a manufacturing trade surplus with the US, but an overall trade deficit because of our import of services. Trump ignores services in this.

The White House (specifically trade adviser Peter Navarro - who has actually had a career in trade policy) is talking about the tariffs bringing in $600-700bn to the federal budget. That's probably a back of the envelope calculation - goods imports to US $3,300bn, average tariff around 20%, so that gives the number estimated. I think Navarro knows the reality of how purchases react to price increases, and trade reroutes itself to avoid tariffs. Previous tariffs on Chinese goods have resulted in extensive fake production centres opening in SE Asia to give the appearance various things coming from different places, for example, and this is very hard to police. So other people are suggesting the actual tariff income is going to be more like $200-300bn.

So I think this might be a little disappointing to Trump in his attempt to try to fund reduced taxes to the rich. And if his tax cuts increase the fiscal deficit, ironically that will just increase the US trade deficit....

In other Trump policy failure news, deportations of illegal migrants are substantially reduced since he came into office. He is creating a lot of news about deportations by doing it very cruelly, and even illegally. But in terms of getting the numbers up, well they are down. But there were only 38,000 deportations in his first month in office, in comparison to an average of 57,000 per month during the previous year. Source: Reuters Apparently a contributory reason is that all this going around arresting people who are hard to deport is filling up their detention facilities, which reduces their processing capacity for dealing with the easy routine cases.

[dyqik]

Importantly, it's a tax increase on the majority of voters to pay for tax decreases on the very rich. Trump was elected because a number of ordinary voters blamed high prices on Biden. The blame here is very direct...

[bjn]

Interesting analysis of Trumps policies, basically pants on head stupid.

https://www.kcl.ac.uk/trumps-tariffs-wh ... -they-work

[TopBadger]

Importantly, it's a tax increase on the majority of voters to pay for tax decreases on the very rich. Trump was elected because a number of ordinary voters blamed high prices on Biden. The blame here is very direct...

Yep - but Trumps voters are stupid and don't understand how tariffs work.

[FlammableFlower]

Importantly, it's a tax increase on the majority of voters to pay for tax decreases on the very rich. Trump was elected because a number of ordinary voters blamed high prices on Biden. The blame here is very direct...

This is the bit that Trump has (recently) been quiet about whilst banging on loudly about trade deficits.

[geejaytee]

https://x.com/krishnanrohit/status/1907587352157106292

You've heard of vibe coding, this is vibe trade policy (and just as erroneous)

[IvanV]

10% on Heard and MacDonald islands. Which have a significant population... Of penguins

Although having a resident human population of just 0, it is a territory of Australia and its waters are licensed to be fished. So it does in fact have exports.

[Grumble]

The tariff list does recognize the sovereignty of Taiwan though.

In the same way that it recognises the independence of French Guiana

[jimbob]

From Internationalskeptics, and it seems to make a stupid sort of sense.

1743706067740.png (125.15 KiB) Viewed 1761 times

[snoozeofreason]

The White House has confirmed that the formula used is 10%, or (abs(imports-exports)/imports) / 2, which ever is greater. ...

Are you sure about the 'abs'? That would mean applying tariffs against countries with whom they had a trade surplus.

Of course, that wouldn't be very many countries and, in any case, just because it would be mad doesn't mean thay wouldn't do it.

[Brightonian]

S&P down nearly 5% today.

[Brightonian]

National Security Council officials sacked on Laura Loomer's say-so: https://www.bbc.com/news/articles/ckgerl183j3o

[Chris Preston]

10% on Heard and MacDonald islands. Which have a significant population... Of penguins

Although having a resident human population of just 0, it is a territory of Australia and its waters are licensed to be fished. So it does in fact have exports.

No The Heard and MacDonald IS do not have exports. All the fish from the fishery are landed in Australia or Mauritius. All the exports will be by Australia or secondary countries that Australia exports to.

[jimbob]

10% on Heard and MacDonald islands. Which have a significant population... Of penguins

Although having a resident human population of just 0, it is a territory of Australia and its waters are licensed to be fished. So it does in fact have exports.

No The Heard and MacDonald IS do not have exports. All the fish from the fishery are landed in Australia or Mauritius. All the exports will be by Australia or secondary countries that Australia exports to.

They do have top level internet domain names, though

[FlammableFlower]

Brilliantly, saw one person on Twitter defending the imposition of 10% on uninhabited islands, such as the Heard Islands, as a method of stopping people registering companies there to avoid tariffs. Which is 1) plainly bollocks and 2) made up attempt at justification: the US has slapped higher tariffs on the Reunion Islands, which are Frenc, than on France itself. So to get round it, Reunion companies can export via France.

More evidence of Internet domain name decisions.

[dyqik]

Brilliantly, saw one person on Twitter defending the imposition of 10% on uninhabited islands, such as the Heard Islands, as a method of stopping people registering companies there to avoid tariffs. Which is 1) plainly bollocks and 2) made up attempt at justification: the US has slapped higher tariffs on the Reunion Islands, which are Frenc, than on France itself. So to get round it, Reunion companies can export via France.

More evidence of Internet domain name decisions.

The Reunion Islands aren't just French, they are part of France, as much as Paris is. They are part of the EU, as well as part of France.

[FlammableFlower]

Good point.

Another good one pointed out on Twitter was that of Lesotho - courtesy of the algorithm they have been given the maximum 50% tariff. They export diamonds and minerals, to the tune of ~$235M but funnily enough, being a poor country they only import ~$7M from the US. What exactly are they supposed to do to redress this? They can't suddenly start buying 100s of millions of dollars of goods and services from the US. Would the US prefer they stop exporting diamonds and minerals to them and bring down the deficit that way?

It's daft.

Oh and the zero tariffs on Russia...

[bjn]

Thinking of the tariffs in pure economic terms is wrong, the tariffs are political tools being used to consolidate power. Fascists are jackdaws, using whatever suits their fancy to centralise power, and this is just one of their tools to do that. You want to be exempted from the tariffs, better bend the knee, either domestically or internationally. Ideally with a few back handers to Trump and friends.

Vlad Vexler, who is a commentator well worth listening to, explains it better than me.


https://youtu.be/uTYi9RC91Fc?feature=shared

[dyqik]

Oh and the zero tariffs on Russia...

Also zero tariffs on:
Belarus
North Korea
The Vatican.

The last one suggests that turning the EU (back) into the Holy Roman Empire is a way around tariffs.

[IvanV]

Oh and the zero tariffs on Russia...

And Belarus and North Korea. But imports to the US from North Korea have probably been zero for a very long time, so that hardly matters.

Economic sanctions have reduced Russian imports to the US from around $18bn before the Ukraine war to around $4bn today. It's mostly minerals - nitrates, platinum - rather than vodka, caviar and furs. Though the ban on Russian vodka was a state-level initiative rather than federal initiative, Alabama was the last to impose it. Belarus would probably be similar on a rather smaller scale - it does have some useful minerals such as graphite - a natural extension of what is in Ukraine.

I guess the Trumpites would say that sanctions have already done the job of decimating Russian imports, and so tariffs are not required to do that. And they may think that it could be a useful point to help in Trump's negotiations to end the Ukraine war. That would be sensible if there was a chance of that. Unfortunately I don't think there is, well not at the moment except on unrealistic terms. Putin just called up another 160,000 conscripts into the army, the largest single call up since the 2WW, which doesn't look like the action of someone intending to end a war soon, except on exceedingly generous terms. But I'm happy to be proved wrong, and who knows what strange things might happen in the course of time.