Clarification on Tariff Chart

[u/BurvinGoel2]

So Ashley and Burnie talked a bit about the new Trump tariffs today and I think there is a bit of context the White House is, (intentionally), leaving out. They framed it as the left hand side numbers are the "tariffs" that other countries are currently putting on us, but this isn't true. The administration chose these numbers through a formula that has nothing to do with a country's tariffs.

Effectively, they took the total exports from a country minus the imports from that country to find the trade deficit, then divided that number by the exports again. For example, we have a $17.9 billion dollar trade deficit with Indonesia. It's exports to us are $28 billion. 17.9 / 28 = .64, aka 64%, the supposed "tariff" that they say is being imposed on us. Ryan Peterson on twitter showcased a graph where he used this equation for each country that is having tariffs imposed and every number comes out perfectly to what is on the chart. If the country would have a percentage that falls below 10%, or like with Guatemala were we actually have a trade surplus, they are hit with 10% as the baseline. This is why the UK has such a low tariff compared to others, as the trade deficit is pretty low.

Basically, the administration is lying about where these numbers are coming from and intentionally misconstruing the facts to manipulate their base. Really got to hand it to Burnie and Ashley for being obviously hesitant about accepting these numbers at face value!

[u/shiruken]

The administration has now admitted that this is exactly how the tariffs are being calculated:

The specific “reciprocal” tariff rate was roughly half of the current trade imbalance because “the president is lenient and he wants to be kind to the world,” a Trump aide told reporters.

“The numbers [for tariffs by country] have been calculated by the Council of Economic Advisers … based on the concept that the trade deficit that we have with any given country is the sum of all trade practices, the sum of all cheating,” a White House official said, calling it “the most fair thing in the world.”

[u/BurvinGoel2 → u/shiruken]

Gotta love that they have no interest in giving the full picture until everyone has already figured it out. Thanks for the link!

[u/shiruken → u/BurvinGoel2]

It's also important to point out that the calculated deficit only considers physical goods, it completely ignores trade in services. As Nobel Prize winning economist Paul Krugman points out:

There’s so much wrong with this approach that it’s hard to know where to start. But one easy thing to point out is that the Trump calculation only considers trade in goods, while ignoring trade in services. This is a big omission. Notably, the European Union runs a substantial surplus with us if you only look at trade in goods — but this is largely offset by an EU deficit in services trade:
[image]
So if Trump’s people had plugged all trade with the EU, not just trade in physical goods, into their formula they would have concluded that Europe is hardly protectionist at all.

[u/BurvinGoel2 → u/shiruken]

That section talking about the AI responses is WILD. Definitely recommend everyone checks that article out.

[u/shiruken → u/BurvinGoel2]

Lol the White House just dropped a white paper and it's full of nonsense

[u/-Plantibodies- → u/shiruken]

God he really is such a weak man pretending to be a strong man. And the weak men out there eat it up.

[u/SkinnyObelix]

The real number of tariffs the EU is charging the US 2.5%-3%.

The "funny" part is that you've got two versions of what the US government considers tariffs on the US. The chart like OP said, but also the Trump version which he explained. And the Trump version is even weirder, Trump considers VAT a tariff on the US, Trump considers food regulations a tariff on the US (as an American company can't produce as cheaply for the EU as they can for the US), he considers car safety regulations a tariff (the fact that tesla isn't allowed to sell the Cybertruck in the EU is a tariff)

It's like a broken clock that gets change twice a day to make sure it's never right.

[u/Apprentice57]

Yeah I was just finding out about that!

Like honestly, when I read that side of the poster I was like "wait we really have that much tariffs on our goods into these countries? Have I been wrong about there being fair basis for our own tariffs?"

And of course no, they basically made the whole thing up based on who we import from more than export. Can't trust something as factual as "what is the average tariff on our goods to x nation" with those folks in the white house.

[u/BurvinGoel2 → u/Apprentice57]

My new rule of thumb is to just triple check everything I hear from different sources. Literally nothing can be taken at face value anymore

[u/trisaratopskt]

I hope the penguins get their maths right!