The lead image explains the methodology.
Understanding the Formula
The New York Times explains How Trump’s Tariff Rates Are Calculated.
In an earlier briefing with reporters, White House officials said the figures were calculated by the Council of Economic Advisers using well-established methodologies. The official added the model was based on the concept that the trade deficit that we have with any given country is the sum of all the unfair trade practices and “cheating” that country has done.
The White House later clarified its methodology in this post. Though it uses some mathematical symbols that might be hard to parse, it confirms that the formula is essentially based on the U.S. trade deficit with a foreign country, divided by the country’s exports.
Reciprocal Tariff Calculations
The Office of the US Trade Representative explains Reciprocal Tariff Calculations
Introduction
To conceptualize reciprocal tariffs, the tariff rates that would drive bilateral trade deficits to zero were computed. While models of international trade generally assume that trade will balance itself over time, the United States has run persistent current account deficits for five decades, indicating that the core premise of most trade models is incorrect.
The failure of trade deficits to balance has many causes, with tariff and non-tariff economic fundamentals as major contributors. Regulatory barriers to American products, environmental reviews, differences in consumption tax rates, compliance hurdles and costs, currency manipulation and undervaluation all serve to deter American goods and keep trade balances distorted. As a result, U.S. consumer demand has been siphoned out of the U.S. economy into the global economy, leading to the closure of more than 90,000 American factories since 1997, and a decline in our manufacturing workforce of more than 6.6 million jobs, more than a third from its peak.
While individually computing the trade deficit effects of tens of thousands of tariff, regulatory, tax and other policies in each country is complex, if not impossible, their combined effects can be proxied by computing the tariff level consistent with driving bilateral trade deficits to zero. If trade deficits are persistent because of tariff and non-tariff policies and fundamentals, then the tariff rate consistent with offsetting these policies and fundamentals is reciprocal and fair.
Findings
The reciprocal tariffs were left-censored at zero. Higher minimum rates might be necessary to limit heterogeneity in rates and reduce transshipment. Tariff rates range from 0 to 99 percent. The unweighted average across deficit countries is 50 percent, and the unweighted average across the entire globe is 20 percent. Weighted by imports, the average across deficit countries is 45 percent, and the average across the entire globe is 41 percent. Standard deviations range from 20.5 to 31.8 percentage points.
Country Specific Tariffs
The weighted average of tariffs is a whopping 41 percent.
Largest Peacetime Tax Hike in History
Pure Malarkey
Fake Numbers
Here’s a link to the Fake Numbers Video.
Erica York comments “A consumption tax can lead to increases in the general price level in the economy or to reductions in nominal wages and profit rates. For wage earners, the distinction is unimportant, because they face the same reduction in buying power whether their nominal wage falls or the prices they face increase.”
Related Posts
April 1, 2025: Excluding Oil, the US Has a Trade Surplus with Canada Every Year Since 2008
Let’s do a fact check on Trump’s Canada claims.
March 22, 2025: Should the US Import Oil from Venezuela Instead of Canada?
The answer to this question is seemingly obvious, but ….
But “Trump Considers Extending Chevron License to Pump Oil in Venezuela”
I sarcastically commented “This makes perfect sense because Venezuela is a much better neighbor than Canada.”
March 24, 2025: Trump Announces 25 Percent Tariffs on Countries that Buy Venezuela Oil
I eagerly await Trump’s major announcement for Venezuela to be the 53rd state.
Q: Since a total halt of Canadian oil would eliminate the US trade deficit with Canada, should we stop importing Canadian oil, then eliminate all tariffs on Canada?
A: Don’t be silly. To do that Canada needs to become the 51st state.
Cheese Was a “Key Achievement” of Trump’s USMCA Trade Agreement
In case you missed it, please note Cheese Was a “Key Achievement” of Trump’s USMCA Trade Agreement
Trump is complaining about Canada’s cheese tariffs. In 2018, he was bragging about cheese.
They got the numbers from the same last minute place kids who didn’t do their homework do… ChatGPT
https://www.newsweek.com/donald-trump-tariffs-chatgpt-2055203
That’s exactly as dumb as I expected. I am heartened that it wasn’t more dumb. Perhaps we’ve turned the corner.
Can you imagine foreign delegations trying to discuss business ?
Trade deficits that do not include services ?
They would rather discuss whether it is the sky that is green, or the other side of the moon.
Where on earth did our idiot-in-chief get that tariff equation?
What utter nonsense!
Today, our markets lost over $3 trillion in market cap so that Trump can collect perhaps $500 billion in tariffs? If the economy does not collapse?
Prices will rise again and corporate margins will fall. Profits will disappear and sales and tax revenues will fall. Farmers will not have access to foreign markets and production will move to our former allies. Trade will grow between our enemies and former allies. Our companies will have to invest billions in factories, buy robots or find uneducated people to do low wage manufacturing jobs… good luck with that!
We used to export our dollars for low cost, or even subsidized goods. Those dollars were then invested in our debt and kept the dollar as the reserve currency of the world.
Not only has trump declared war on our friends and empowered our enemies, he is isolating America from the rest of the world.
Trump nightmare #2 is now gaining momentum.
Elections have consequenses!
Study Bessent’s comments. U might learn something
Erica York’s quote is factually incorrect and, I suspect, disingenuous:
(1) Tariffs borne by foreign companies are not a domestic consumption tax.
(2) She acknowledges that reductions in profit rates are possible, but then pretends that wage earners necessarily face price increases or wage reductions. Reductions in profit rates, especially for foreign companies, do not impact domestic wage earners.
The empirical data quoted in the article is that only 1/4 of the tariff rate gets passed along to customers. So the costs will generally be borne by either foreign or domestic companies, rather than consumers or wage earners.
How exactly does Trump’s economics team going to replace the income tax with taxes from tariffs if no taxes from tariffs are collected because everything being imported will be produced domestically?
huge layoffs at whirlpool USA https://www.desmoinesregister.com/story/money/business/2025/04/01/whirlpool-layoffs-amana-iowa-plant-losing-one-third-of-workforce/82757127007/?utm_campaign=trueanthem&utm_medium=social&utm_source=facebook
That Giant Sucking Sound is back.
how did the maga flock get so crazy. at least the charlie manson family were high on LSD all day and night. Maybe trump changed the bibles in their dumbfuck churches to the new trump bibles…………
U know them all: Trump is a criminal. Trump is a proven liar. Trump is a clown, Trump in his mosque changed the rules: “a liar who lied to a liar” can change the USCMA agreement and the nuke deal with Iran.
Finally, Chuck Grassley and the other remaining Republican conservatives in the Senate seem to have come to their senses and are trying to stem the madness out of Trump‘s tariffs. It’s amazing that conservatives have been silent so far about the wholesale destruction of a global trading system that was built by American conservatism.
grassley is a radical warmongering imperial uniparty old dirt bag. the word conservative with his name is silly. he loves farmer bailouts and subsidies……
But is he wrong with respect to tariffs? No. He’s spot on that Trump’s tariff fixation is economically destructive, and not to globalists, but to every day, normal Americans.
the tariffs are the dumbest thing in a century. the old hag from iowa got that right. big whoop.
The present problems are the result of conservative policies to begin with. The “Free Trade even if others put tariffs on yours” is economic and social suicide. The system must fall.
Mish, why have you allowed so many Canadian’s on your blog?😜
QQQ entered Sept 11 fractal zone. The puke media will be out of ammunition if QQQ will rise above July high. QQQ above 500 might trap the amygdala traders in Biden’s sinkhole .
Well say hello to shortages and price hikes.
Tarriff brings immediate price hike.
Now in order for a country to bring down their tariff rate, they will either have to accept more product from the US or sell less to the US. Well since we don’t make anything they’ll just have to sell us less. And we aren’t going to make more stuff (at least in Major US cities) because the regulations are too onerous. I know i’ve built 3 different manufacturing plants ($100 million +) and the answer at the end of each of one was those companies were never going to do that again.
Trump was handed the damn answer on the silver platter with the recent reversal of the Chevron deference. He could be axing or suing these agencies out of existence. Instead he is just laying off workers, which doesn’t eliminate their rules and regs! It only hits the pause button! He doesn’t need the tariffs, he just needs to reduce the rules and regs, which he isn’t doing effectively either.
Now when he creates the next 1929, I predict he is going to ensure another commie like FDR rises to power and the conservative movement will be crushed for a generation.
Whoa…
In a competitive market with adequate supply, tariffs generally do not bring immediate price hikes commensurate with the tariffs. They generally result in lower profit margins rather than 1:1 price increases.
The U.S. is still world’s 2nd largest manufacturer; the base is weak but not zero.
Regulatory reform is on the way, just slower than cutting headcount and renegotiating trade balance.
That’s probably industry dependent. I have already seen supplier increases across the board since trump came in to office (before 4/2). In my industry (construction), everyone has been used to easy money, and supplier increases come often. There is also much consolidation of the industry, especially on the supplier side which probably makes the justification for price hikes easier. I would bet though as the industry unwinds over the next couple of years due to interest rates, suppliers will become more competitive again.
During 1st Trump admin, supplier increases came immediately after new tariffs, especially towards china. I’m only n=1 one but my point is to counter your argument that tariffs generally do not bring immediate price hikes (there is not adequate supply).
Yes, it’s certainly industry- and product-dependent. I hope your industry weathers the storm ok, seems like there’s going to be plenty of demand for construction even if pricing will be chaotic for a while.
The accepted data (used in the USTR’s formula shown in the graphic in Mish’s article) are that price elasticity to tariffs is only 25%. Guess we’re going to find out whether that’s still true in today’s economy.
To restore adequate levels of competition, it’s my hope that the economic plan includes restoring antitrust enforcement to pre-1980s standards. A federal judge named Robert Bork screwed everything up with a flawed legal-brained assessment of what constitutes a competitive market. They almost rewarded him with a Supreme Court seat. He had some legit criticism of prior anti-trust enforcement, but his solution has made everything worse.
Kennedy made a good point: India and China have high tariffs and no inflation.
I guess one day we will find out where Trump’s stupid tariff formula came from. While Great Balls may be a prime suspect, my suspicion is the formula was randomly generated by ChatGPT.
The Office of the US Trade Representative explained here: Reciprocal Tariff Calculations. All makes sense.
My Introduction:
International trade rarely will balance itself out over time. By its nature, it’s damn near impossible for that to occur, and it obviously hasn’t. It would always need input to figure out the ever changing dynamics of trade. Even when/if you could, the data would be good for such a short period of time, that it would be useless.
While a formula such as Trumps Administration has proposed, it’s something on paper finally. It’s clean, makes sense, and moves with the fluctuations of time, and that serves to allow you to catch it, alter the financials to even things back out. Toss a % in there to allow so not to complicate and add more work, and your onto something imo. In fact it will cause things to bounce around within that parameter that there in, and make things easier to track and understand.
Findings
So far we have the “Usual Suspects” We May Need or Things Could Change or But if this happens or How do we know what or This will definitely cause or No way this can ETC. They just ooze the stuff, so no surprise, What we actually have for “Findings” is “Nothing” because it hasn’t even been implemented per say, and until it’s fully blown out, the data isn’t even available. It’s hearsay or conjecture or speculation at best. They could be right as easily as wrong. We need “Actual Numbers for Actual Findings to make any sense at all.
Breath People, we will still be America, most won’t see, feel, discuss, or care about what changes, would be my guess.
The Luigi Reddit crowd cannot breathe. They just yell and threaten to destroy and be violent. No difference in their posting here
Well Canada may have just agreed with Trump…
The higher the deficit, the higher the tariff. Makes sense and is a good incentive for to surplus country to reduce that surplus. Logical and frankly you have to start somewhere so start with this and if progress is made you can modify it.
I wonder if you can set up a market where you can trade tariffs like the carbon credit market. Companies could trade tariffs offsets. I will have to think about how to do this. Could be big money in it.
Did you hear? Canada just caved! They agreed to drop all tariffs if we did as well. At least that’s what I got from: “Canadian leader Doug Ford proposes eliminating tariffs on US imports — if President Trump does the same“
I would love zero tariffs between the US and Canada.
So would Canada. But the US would never go for that.
Nope. Canada just put 25% tariffs on cars imported from the US. But no tariffs on cars imported from Mexico. And no tariffs on auto parts.
Downvoters don’t know a thing about financial arbitrage I see.
Is anyone surprised that China runs such a high trade surplus with us with such a high tariff rate + currency manipulation? I’m sure as hell not.
So exactly how are we supposed to narrow that trade surplus? Should we even care about it maybe is a better question. Everyone loves cheap goods from China, right?
IMHO, the later answer is kind of like us asking ourselves if we should care about budget deficits. Well, hopefully, a reasonable person would say yes. So again, how are we to solve massive trade & budget deficits? That’s the central question, right?
The answer to this question is simple, if you care about these massive, structural economic problems.
YOU DO SOMETHING DIFFERENT RATHER THAN STAYING WITH THE STATUS QUO, WHICH GOT US INTO THIS PROBLEM.
That’s what Trump is doing. If you don’t like it, no worries. That’s your prerogative. If you want to do something about it that’s different, then you need to get your pick for president elected.
Real avg earnings are about where they were in the 1970’s. 50 years of stagnation for workers and somehow people are surprised that change needs to occur?
Nicely put!
+1000 thumbs up.
Most of my mandatory spending is Food and Energy. The U.S. has plenty of food and energy. Those price will not rise. Maybe avocados will go up but I only eat those once a month. LOL My total expenditures for my family are probably 22k a year for the above.
My expenditures for clothing, gadgets, etc come to maybe $2.5k a year. So that may increase to $3000 after tariffs. This comes to a 3% increase my overall spending. Tariffs will be MEH for the U.S. The U.S. makes up 34% of world consumption and the trade deficit is 1.2 trillion. Where does China…etc find customers to make up for the 1.2 trillion that does not go to the U.S. Also, what happens if the 1.2 trillion stays in the U.S. to buy stuff. That is a huge stimulus
The U.S. is a service based economy. So who in the U.S. loses jobs? Not manufacturers? Maybe Amazon and Walmart warehouse workers and Port dock workers? But as I said, a 3% increase in my budget is probably not going to slow down my spending habits so job loss will be minimal. As long as people keep buying coffee, eating out, we will be okay as the service sector accounts for 77% of the GDP.
And if you’re an AVERAGE income homeowner, then your property taxes & insurance are what have also been eating into / eliminating your disposable income. I’d love to see real numbers in FL look like in terms of property tax & insurance increases & how that’s had an inverse effect on people dropping their insurance, if they own their homes.
Unfortunately, the only viable fix for this is a recession and probably not a run-of-the-mill one like back in the early 90’s, when I was graduating college.
we export a ton of services. those might suffer from anti usa sentiment.
A trade deficit is not in the same category as a budget deficit, unless we want to go completely stupid and note that a trade deficit = a capital account surplus which must thereby be exactly of the same order as a budget surplus. Thus, by this inane semantic equivalence a trade deficit which is a capital account surplus must be equivalent to a budget surplus, right? Right?
If Trump was really serious about doing something different he would be repealing regulations and streamlining permitting processes and reducing the impact of laws like NEPA, plus reining in the fraud and waste that are endemic to Social Security, Medicare and Medicaid. That would go a long way towards actually addressing the budget deficit. But Trump isn’t interested in reducing the budget deficit and he isn’t doing anything to reduce regulatory red tape that impedes American industry, instead the he’s going all in on destroying our trade-based economy and saying that doing so will improve things for the American people when all it will do is make most of them poorer and enrich a few chosen and protected special interests.
The explanation for the tariff brew concocted by the White House is completely nonsensical. It looks like the country is run by a bunch of economic illiterates. A random tariff number generator would have done a better job.
I just read that Ford is offering worker discounts on new vehicles. Tasty.
I wouldn’t buy a Ford even if they’d pay me to.
By your name I am sure you know this by heart.
Proverbs 11:1 states, “A false balance is an abomination to the Lord, but a just weight is his delight”
The Bible clearly says that Trump’s tariff calculation has Celestial backing and woe to those who ignore His wishes.
I used to drive an Expedition for 22 years….Due to my old age I had to sell it and switch to Jeep Cherokee….
Trump shouldda had taxed all cars made in Europe and japan…
All this chaos so he could own the libs. Sure feels good doesn’t it?
He doesn’t care about the libs. He cares about getting attention, and he’s in hog heaven today.
bingo. a winner. only thing that matters to a narcissist and nihilist. nothing else matters. democracy works. pax amerika is an empire of nihilists. pass the fentanyl. blame the chinese.
The only math that matters are the TRILLIONS in losses on equities, business activity and wages as a result of these idiotic tariff plays.
the smart people commenting before election warned that trump and gop would crash the stock market and economy and here we are….some of us positioned and banked profits on that assumption.
Trump isn’t a bull in a china shop, he’s a pyromaniac in a fuel depot tossing matches while the gutless GOP congress eggs him on.
The Wisconsin supreme court win for democrats is already foreshadowing dems taking Congress but let the pyromaniac burn down the country before then.
It sounds like you are long and leveraged equities. Yeah?
Nope. You must be new here. I have a very diversified portfolio of real estate, foreign currencies, bonds (corporate, municipal, government), a small bit of gold, and some equities protected with options strategies. I just bought back a ton of calls I sold a few weeks ago on IWM, some oil stocks and other things I positioned for The Trumpocolypse.™
I am almost always long and short this market since republicans always crashes the economy I was well prepared to profit from this mess.
While everyone is panicking, I am picking up some things I like. I make far more money with volatility but that’s only because I know what I’m doing. Clueless Joe is losing his retirement portfolio or pension and that should concern you. Don’t worry about me, I’m rich and will be fine.
Everyone here says they are rich and fine. I have yet to read someone here saying I called it all wrong and got crushed.
“Im entitled to my bubble assets!” Waaaaaaaa. If stocks went down 50% we’d still be higher than we were 5 years ago. Get a grip
You sound worried, mid-terms and impeachment hearings just around the corner.
LOL. I sound worried? We read your posts though I’m not sure why
very true. i’m up on the day. cannot wait for r/e to crash so i can pick up some high cap rate properties in a few years. zion don is our nero. can’t wait for west coast states to nullify tariffs.
And WI also voted to require voter ID, not exactly a liberal talking point.
And, no, the stock market IS NOT the only thing that matters.
FAR FROM IT.
I’m running a major trade deficit with Safeway.
I keep buying stuff from them, but they never buy anything from me. Unfair! Something must be done! Over the years I’ve cumulatively lost thousands of dollars in this clearly exploitative arrangement. This calls for me to impose punitive price hikes on all of their groceries. That’ll teach them to sell me things. Ha!
You’ve given them pieces of paper, and they’ve given you groceries. Doesn’t sound like a bad deal for you.
Five finger tariffs have been all the rage for the last couple of years in retail shopping.
You mean five-finger discount.
Try Aldi or Walmart
Especially since you acted as their security guard to keep thieves from stealing all they have for free for decades. You should walk away and let the thieves empty the store.
Always like to check in to see the people day trading their multi-million dollar portfolios while fretting about the price of a dozen eggs at some big box store abomination.
The Money Changers have been kicked out of the Temple.
wrong. zion don just gifted israel more free money…..and weapons. and not to mention body guards………
That too shall pass. Also Israel is not a temple by any stretch of the imagination.
What scares me most about Trump is that he really believe believes in these tariffs like a socialist believes in price controls. And my guess is that like the socialist, when their plans blow apart, he won’t accept that his plan is flawed and instead double down. I think we are just at the very beginning of the economic misery to come. What is even worse is that the dollar is not going to be the safe haven it was back in 2009.
Raising taxes is hard to do. Tariffs are a form of consumption tax. Just buy something that is not effected by tariffs. Go buy Titos vodka made in the U.S. instead of Grey Goose from France. By the way, Titos really has no market share in France because France puts a 100% tariff on Titos. But in the U.S. you get Grey Goose at market prices because there is not tariff on it. Lots of these tariffs will be removed once the other country agrees to remove their tariffs on U.S. goods.
Markets panic of the unknown. What is the plan going forward? “We will figure out as we go along,” is not an acceptable answer for the market.
How can the anyone, if he or she is perfectly honest, be surprised at what is happening. The question is what to expect going forward that is not very clear at this point.
The plunge in gold’s price today along with equities indicates a liquidity problem as its safe-haven prospect get discarded.
I agree, however I noticed that bitcoin is going up, which would go against that theory. Perhaps the people having margin calls don’t have much bitcoin and/or bitcoin is seen as a hedge against the dollar.
Just 30 years ago the party that was in favor of tariffs and a strong border was the Democrats. But now that Orange man does it, its the end of the world. Ironic
You must not own any stocks.
The idea we should be beholden to asset bubbles is disgusting. I can think beyond my investments. The biggest investment is future generations. Not boomers portfolios.
Go ahead and crank out a bunch of kids. You’ll be supporting them the rest of their lives because opportunity is over unless your daddy is a billionaire.
Nice work.
Unless we learn to produce more productive children, who’s gonna pay your social security?
Certainly not your terminally unemployed spawn.
HERE IS SOMETHING UN AMERIKAN. I wish I had a silver dollar for every asshole who told me about their stuff and dumb vacations the past 40 years………….no wonder zuck got so rich. assholes posting photos of themselves and vacations and stuff on instagram and FB…………
Welcome to:
-desires of flesh
-lust of eyes
-the boasting of life
Zuck with his Chinese minion knew exactly ho to capitalize on human decadence….
I agree. The bubble has to burst at some point. I’d rather see it burst when the Dow got to 45K vs 60K. A significant part of our inflation problem is due to the wealth effect. The top 30% have been powering the economy forward for the last 4+ years. It’s time for the wealthy to feel some financial pain. Among many things, what’s needed is a million or more short-term rentals to flood the market.
The smart money slowly moved to treasuries & brokered CDs, when interest rates started climbing. Granted, most people with a good deal of wealth not in retirement plans can’t move all of their money due to taxes. But nobody should have held onto any sort of laggard equity investment over the last 3 years. Get rid of that suff & move into safe haven investments.
I bought into TLT & SGOV when they had mostly finished their price declines when interest rates had finished rising. I’ve been drawing 4-5% dividends for the last two years, and if a recession comes, the Fed is going to start buying like crazy. The price of TLT is going to rocket towards $130 at minimum & SGOV is going to do the same.
Employing tariffs as economic sabotage is not the best means for popping asset bubbles.
The last time anyone was this stupid was 1930; 30 year ago Democrats were generally pretty pro free trade
No Mike. No. Pull up the platforms from the 70’s and 80’s.
ZION DON WANTS HISTORY TO REMEMBER HIM. THAT’S ALL.
Clinton was an interlude. In the ’80’s Democrats were quite protectionist. Just ask Dick Gephardt.
I don’t ever recall any democrat tariffing the entire world. Stop making stupid equivalencies.
If ever there was a group Pro American labor. Your memory obviously stinks. A result of TDS
TDS? Tell me which democrat tariffed the entire world? You seem to be the one with TDS (Type II) – trump can do no wrong even in the face of pure stupidity of tariffing the whole world.
Go ahead keep defending this stupid stuff, it shows you’re the one with TDS.
Hunter Biden, obviously, with his portfolio of secret tarrifs hidden in his porn folder.
They called it “fair trade“ and opposed Republicans who wanted free trade.
Happy Liberation Day
Happy Libation Day
The fact that he’s making it so public, means he wants to send a message (political leverage of some sort). I don’t remember anyone protesting for Biden increasing the tariffs to China.
Can you give an example of a secret tariff?
You just don’t know until you fill out the custom declaration what the rate will be. It would be like the Doomsday Machine in Dr Strangelove.
I think you’re describing bribes.
In 2020 the virus forced people to move away from home, to buy houses and cars.
The dealer near me has thousand of cars in the safe parking lot, financed by debt,
waiting for buyers. If they will not pour in, as they did in 2020, he will offer large discounts, before they become “bad items”. If correct buyers will shun both houses and cars. Both will deflate.
I agree with mish’s critiques about trump’s tariffs. It’s incredibly stupid.
here you go Mish: Sobering insight from The Budget Lab:
https://budgetlab.yale.edu/research/where-we-stand-fiscal-economic-and-distributional-effects-all-us-tariffs-enacted-2025-through-april
Headline: If all tariffs go into effect as proposed, -0.87% drag on 2025 GDP growth, 2.3% price level increase, -0.6% persistent drag on economy year-over-year. Canada hardest hit.
Their model is wrong.
Since this has been in works for some time what are initial consequences.
Initial jobless claims at a better then expected 219k this morning release.
Biden manufacturing recession already easing as Trump administration enters third month of its existence.
Lot of howling from outside US borders, but what exactly are all the talkers going to do about it?
They can stomp their feet and point threatening fingers or they can ease restrictions levied by them on US Business.
And long run inflation expectations haven’t moved at all. I doubt these are on at the same level a year from now and expect much better deals than we had before with each of these countries. But impatience and screaming is all they have
Reactions seem fairly hysterical to me in currencies so am fading it this morning.
I tend to be early but by the time what happens during the behind the scenes phone calls getting made and it becomes public knowledge has a Lag.
Give an example of a ‘better deal’ for anyone that isn’t a billionaire.
Since my other post which explained things as a consequence of globalization is up for review. Will give this another try in simply terms.
Here is an example, John q Public gets a job that was destined for overseas and instead now will occur in the US. Instead of using credit card to buy, JqP can now use what they earn to make that purchase.
Instead of being the debt serf for finance industry, interest money saved allows JqP to buy a new baseball for young johnny jr.
Globalization has become where Mercantilist nations set economic policy targeting US consumer, but does not allow US business access to their own market, has hit the Brick wall named Donald.
This is a fine example, but you left out a lot of the possible repercussions.
John probably already had a job here in the US as the unemployment rate is quite low at 4.1% and 10,000 Boomers retire every day. But OK, let’s assume he gets a ‘better’ job paying him somewhat more.
What about Jane Q Public? She already had a US job she wanted and used its income to buy a car for her family, and she chose a good, cheaper model from abroad.
Now that John gets to work in the US auto factory, Jane can’t buy that same foreign car at the same price any longer (with the tariff). So Jane can afford less car and is worse off, even if John is better off.
See the nuance of why people may be concerned about the effects of tariffs?
Is Jane buying that foreign Car with earnings or via auto loan with little down pay?
Does not matter much how much something costs as long as John and Jane are not going further down the hole into Debt. Which they are now struggling to pay.
Current model of Targeted Mercantilist Globalization has failed.
Still am waiting to hear how US Consumer is supposed to go deeper into debt so as to buy from all over the world and that is sustainable without default.
Since Banks and Credit card company’s are going to be the Bag holders when John and Jane default on consumer Debt, would not surprise me in least if finance industry balance sheets are deteriorating. In spite of J. Powell saying everything is cool.
“Does not matter much how much something costs…”?
Why do you get to decide this for Jane? She has individual rights in America and can decide to buy or finance something however she wants.
What utter and complete hubris! Your political guy wants tariffs, so you jump thru hoops to rationalize it. How about asking if this supposed tax-collecting (deficit-reducing) measure also takes away from my freedom to choose where and how to work, and what to buy with my own money?
So sad you can’t see the bigger picture
Relax everyone. Trump is still negotiating. Everything is gonna be alright.
He’s ‘negotiating’ with uninhabited islands, so this will take a while.
Your god is a petulant clown.
If my god was the stock market I would probably agree.
The penguins are having a phone call with Trump this afternoon.
Just so I understand the order of events: Canada then Greenland then Venezuela. Personally I think Greenland will be first And to be honest I didn’t know about Venezuela but love the idea of emptying out our prisons there. Hopefully there will be enough prison space left over for the DC grifters.
Holy Shit! This is complete nonsense.
Or maybe nations could trade equal amounts of goods on an annual basis. No imbalance = no tariffs.
There’s a prehistoric thought.
Nations don’t ‘trade’, individual businesses and people do.
Under your logic, how can a local carpenter trade his services (not goods) for the coffee he wants to buy from Vietnam (because we make almost no coffee in the US)? He can’t. So he should do without coffee? Why do you hate individual choices so much?
Or do you just not understand how markets and individual choices work?
Excellent point. Since importers are paying the tax, they have 4 choices (or a combination). Pass on the tax to US consumers, try to get concessions from the manufacturer/exporter, eat the cost in their bottom line, or find a domestic replacement (of course if the domestic item is more expensive, then the price will be passed on). However, with things like coffee, bananas, etc there really is less choices, since there is no domestic supply. They can try to get concessions from growers, but that is doubtful, so, most likely the tax will be passed to us consumers.
Biden also increased tariffs Biden finalizes increases to some of Trump’s China tariffs | CNN Politics
I don’t remember the topic to be so hot and so heavily scrutinized here or anywhere else.
Meanwhile, the workers union (UAW) likes it: In a Victory for Autoworkers, Auto Tariffs Mark the Beginning of the End of NAFTA and the “Free Trade” Disaster – UAW | United Automobile, Aerospace and Agricultural Implement Workers of America
I have a feeling many of you would feel better with an AOC government, as she will definitely hear your “formula” concerns. Why don’t you just wait and see the political gains/losses at the end (tariffs have results unpredictable to non-insiders), instead of screaming speculations of doom?
I remember one blogger was lecturing me on energy prices during Obama, after I told him high prices are a huge problem and can destroy even the wealthy. He was showing me tables and graphs. He’s formerly wealthy now, and last year he even had a hard time paying his heating bill in California. “Formulas and graphs”… right…
Trump and DOGE Defund Program That Boosted American Manufacturing for Decades
President Donald Trump says taxing imports will strengthen domestic manufacturing. Hours before announcing new tariffs, his administration cut support for centers that help US firms do just that. https://www.wired.com/story/nist-trump-manufacturing-extension-partnership/
“As a result, U.S. consumer demand has been siphoned out of the U.S. economy into the global economy, leading to the closure of more than 90,000 American factories since 1997, and a decline in our manufacturing workforce of more than 6.6 million jobs, more than a third from its peak.”
Alternately:
Over the second half of the 20th century the purchasing power of the U.S. dollar dropped significantly, which resulted in a decline in the standard of living for the ‘average’ American. Into the 21st century those people hedonically adjusted to the decline by purchasing goods that were made of cheaper materials (more plastics) by cheaper labor (overseas). This has led to the closure of more than 90,000 American factories since 1997.
Your version might get you a pass at Trump University, but nowhere else.
It’s OK that you don’t understand the concept, unfortunately too many don’t.
The reason pennies are zinc today and quarters/dimes have no silver is because the dollar has declined in value. Just as in old empires when coinage was changed to mask declining value.
https://money.visualcapitalist.com/currency-and-the-collapse-of-the-roman-empire/
Perhaps an example will help you understand-
In the 1980s Walmart advertised buying “made in USA”, but has shifted to only pushing low prices and is known for cheap Chinese imports.
https://m.youtube.com/watch?v=XG-GqDeLfI4
US imposed 10% tariff on the uninhabited Heard and MacDonald Is in the deep south of the Indian Ocean and another Oz dependency, Norfolk Island in the Pacific, with about 1000 people got 29%. Despite not having any international trade.
So someone is sad that they may not be able to use their fake addresses again.
Read up on trade finance.
If this is making America Great, it surely hurts ordinary Americans, our businesses and tax revenues. Corporate profits and the taxes they pay? Gone…
I sure hope we learn that narcissists and actors do not have anyones interests but their own. Can we survive four more years of this liars destructive policies?
Do our allies trust us? NO!
Did the Ukraine war end on day one? NO!
Did the war in Israel/Gaza end on day one? NO!
The Russian Ruble is up by 20%. They must be happy…
Whose side is Trump on?
As an American consumer? Not mine. As a farm owner? Not mine.
Trump is a disaster!
Do we trust our allies? No and never did. Countries never trust each other. That they do is a myth.
Really, so, you don’t trust any neighbor or supposed friend?
I am not a country but an individual. They act differently. I for example would not enroll you by force to be my bodyguard but countries do that all the time.
Eat at home, leftovers are good, and skip the summer vacation.
Above all, have no debt.
Remember, you neighbors and their pets can be an excellent source of protein.
Or cheap labor to grow food. I think you discovered a new formula!
first principles. trump is a nihilist and a narcissist who does NOT care about anything but being in the limelight. amerikans are nihilists for the most part. we’ve been a world wide war mongering imperial power since at least 1898. as republic of plato warned, democracy works perfectly.
As well as being a huge effective tax rise on the US people….this is extremely regressive. Poorer people spend a bigger proportion of their income on “stuff” so it will hit poorer people much harder than the rich. As we know, Trump is all about helping the working class….or did I miss something?
The poor will have higher wages and real jobs to compensate for higher costs. Demand for hard working talent exceeds the supply in USA. Education is free but if you spent twelve years playing basketball and didn’t learn the three R’s then you probably don’t qualify for a job.
There’s already a shortage of young people who want to be welders or work in factories and warehouses.
So we’re now going to make more factories here?
Minimum wage in Red states lags far behind Blue states… Your credulity is noted, comrade
The dollar store economy is in for a world of hurt.
Possibly. But guess where Trump and Musk don’t shop?
Dollars, which are fiat and a debt instrument (i.e. good to settle all public and private debts in the U.S.), are traded for the goods and services of people and corporations based in foreign countries. In turn, those entities circulate some portion of the dollars back to the U.S. by making similar purchases of things originating there. The executive branch thinks the net should be zero for every nation or trade group, therefore tariffs?
It would be net zero if the exporters paid the tariffs. Alas, it’s the importers who pay up. Tax as the taxman can.
i wonder if fat old zion don knows this. i doubt it. he destroyed a few hundred million dollar r/e empire his daddy gifted him. he’s really our ubermensch for dumbfucks. long live pax dumbfuckistan.
No, if trade were net zero then there presumably would be no need for tariffs.
No matter the formula. Read the result. President Trump cleverly set tariffs at half the calculated tariff barrier erected by each nation. Obviously a counter tariff would be met with the whole tariff.
The easy solution for EU is to create local markets to replace US markets. European markets are inhibited by 23% consumption taxes and confiscatory taxes on wealth creation, i.e. profits and wages. All these counter productive taxes are redistributed to the unproductive by a giant aristocratic government class who skim a large share for themselves.
The prevailing wisdom in EU is to erect higher tariffs against US imports. That wisdom would be met without sympathy, 40% tariffs, and a surcharge for the amount that each nation’s defense spending is less than 5% of GNP.
Brussels EU government aristocrats propose talks. The issue up for discussion is how EU can make the transition from mercantilist export dirigiste socialism to productive self sustaining free market capitalism. Job one is to eliminate the Brussels EU government aristocrats. USA has no say in the matter. Recent democratic elections have voters proposing to replace the dirigiste class. The dirigiste declare such elections invalid and the candidates criminal. Discussion is censored. Bloody revolutions are the option to democratic elections. USA has no interest in the matter.
“President Trump cleverly” lol
Trump said, “Make my day!”
A HUGE reason we can’t export food products is due to GMO’s and chemicals we use on them. Start with that and maybe you’ll see other countries more accepting of our S**TTY processed, altered, chemically laced foods. Bayer / Monsanto continues to pay out billions in settlements with 67K lawsuits pending.
RFK Jr is probably not allowed to talk about GMOs, even if he knows that dealing with them can MAHA. It’s just not a convenient talking point, let alone Big Ag might delete him quick if he said the wrong things.
This is not that hard to fix.
Canada and Mexico should be very pleased.
I don’t see why. The North American auto industry is going to shut down in a few weeks. That’s a lot of well paid workers being laid off in all 3 countries.
Who needs jobs? Exacting Trump’s revenge on his longstanding enemies is America’s First Job. We must support Trump and his ego’s need for revenge. Who is with me???
his cult of acid head hippy chics. he’s like charlie manson.
Compared to other countries tariffs. Pretty obvious.
At least you’re honest about having no idea what you’re talking about. Perfect, unblemished stupidity.
imported goods price goes up 20% or more suddenly will bring recession almost certainly. There will be winners and losers but losers will be much more. Autoworkers? Yes, possible.
The UAW seems to like the tariffs. https://spectrumlocalnews.com/nys/buffalo/transportation/2025/04/02/uaw-supports-trump-tariffs