Sunday, April 6, 2025

Tariffs Applyed on April 2

We have now had a chance to look at the tariffs that Felon-47 presented a couple days ago.  The question whose ass did these numbers come from?  From the office of US Trade Representative.  See the attached image for the formula.

Reference from the Office of the United States Trade Representative

'i' is effectively which country are we talking about.  Delta T is the tariff to be imposed.

Above the fraction bar is x for exports from a country, minus 'm' for imports, in billions.  This would be the trade deficit or surplus.


Below the fraction bar is Epsilon times Phi times 'm'.

Epsilon is defined as "elasticity" of "import demand", which is effectively a random number between 2 and who knows?  So the administration set it to arbitrarily 4.  Phi is elasticity of import prices, and is also effectively a random number between .01 and 1.  And was set to .25.  Then we have 'm' again, for imports from the country in question.

So while this is designed to look really complex and well thought out, all it is saying is Trade Deficit divided by imports from the country in question.  Because Epsilon * Phi = 1.

Even though the math-genius-in-chief's office says this is THE formula, that is a bald ass lie.  There is no mention of the final +10% added to the tariff. 

And if this formula was generally used, you wouldn't have islands whose economy is penguin droppings, Diego Garcia, with a population consisting of 4,000 American military personnel, with a 10% tariff rate.  0-0 divided by 4*.25*0.  

There is no mention that IF the result of the formula is 0 or less, then the tariff is +10%.

And the numbers on the top have been inflated.  For example, Canada's trade deficit is declared at $200 billion.  When the official number, by the US's own documentation, the number is $63.3 billion.
see here...

Why the inflated number?  The real reason is the administration wants to make a strong statement.  This is a bargaining technique, So they are not including US export SERVICES.  Which in truth, is a fairly significant number.

So for all the claim that the Serial-Liar-In-Chief said went into these tariff calculations, it can be best summed up as this:


Numbers they made up
----------------------------
Fudge factor * Fudge factor * A number they made up
plus
additional Fudge factor (or minus a fudge factor if country = Russia or Belarus)

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