1/22
@JamesSurowiecki
Just figured out where these fake tariff rates come from. They didn't actually calculate tariff rates + non-tariff barriers, as they say they did. Instead, for every country, they just took our trade deficit with that country and divided it by the country's exports to us.
So we have a $17.9 billion trade deficit with Indonesia. Its exports to us are $28 billion. $17.9/$28 = 64%, which Trump claims is the tariff rate Indonesia charges us. What extraordinary nonsense this is.
[Quoted tweet]
It's also important to understand that the tariff rates that foreign countries are supposedly charging us are just made-up numbers. South Korea, with which we have a trade agreement, is not charging a 50% tariff on U.S. exports. Nor is the EU charging a 39% tariff.
2/22
@JamesSurowiecki
Even given that it's Trump, I cannot believe they said "We'll just divide the trade deficit by imports and tell people that's the tariff rate." And then they decided to set our tariffs by just cutting that totally made-up rate in half! This is so dumb and deceptive.
3/22
@JamesSurowiecki
How in God's name did Scott Bessent agree to sign off on this?
4/22
@JamesSurowiecki
This tweet is correct, but it's actually worse than I thought: in calculating the tariff rate, Trump's people only used the trade deficit in goods. So even though we run a trade surplus in services with the world, those exports don't count as far as Trump is concerned.
https://nitter.poast.org/JamesSurowiecki/status/1907559189234196942
5/22
@Psychonaut1001
I’m Australian,
America has a trade SURPLUS with us, and they’ve STILL put a 10% tariff on us.
6/22
@JamesSurowiecki
Yes, any country where we have a trade surplus or where the trade deficit/imports is less than 10% had their tariff rate listed as 10%.
7/22
@orthonormalist
[Quoted tweet]
DID I CRACK IT?
I think I figured out at least a chunk of the math.
It's trade deficit divided by their exports.
EU: exports 531.6, imports 333.4, deficit 198.2. 198.2/531.6 is 37, close to 39.
Israel: exports 22.2, imports 14.8, deficit 7.4. 7.4/22.2 is 33.
8/22
@JamesSurowiecki
They're also only looking at goods, so even though we run a massive services surplus with the world, that didn't count when they calculated these imaginary "tariff rates."
9/22
@mdangremond
How many calculations have you checked?
10/22
@JamesSurowiecki
A few. But it's obviously right. Look at the UK. The UK has a 20% VAT, which Trump says counts as a non-tariff barrier. But its tariff rate is supposedly only 10%. That's because our balance of trade with the UK is almost even, and all countries are listed as having at least a 10% tariff rate.
11/22
@SpencerHakimian
You cannot be serious.
12/22
@JamesSurowiecki
Amazingly, I am. They're also only looking at goods. So even though we run a massive services surplus with the world, Trump just ignored that when calculating the "tariff rate."
13/22
@JamesGozzi
Nonsense that is going to work.
Argentina
- Removed all tariffs
Vietnam
- Removed all tariffs
Israel
- Removed all tariffs
Canada
- Moving toward no tariffs
Mexico
- No tariffs planned
India
- Considering reducing tariffs
EU
- Planning retaliation
Australia
- No tariffs planned
14/22
@JamesSurowiecki
Do you anticipate American companies doing a lot of exporting to Vietnam now?
15/22
@Phili_Thomp
That's why some countries are charged less than their actual MFN rate
Turkey, 16.2%, 10% Trump rate
Argentina, 13.4%, 10% Trump rate
Morocco, 14%, 10% Trump rate
For what it's worth (nothing) there is a U.S.- FTA with Morocco... And it's the Mexico carmaker for Europe
16/22
@JamesSurowiecki
Yes - if our balance of trade with a country is roughly even (or trade deficit/imports is less than 10%), they're listed as 10%.
17/22
@ChrisKartalia
If the rates are inflated, all the easier for countries to “cut” them, Trump claims a win, and gets the 10% ongoing rate that he really wants
18/22
@JamesSurowiecki
In some cases, the rates listed are less than the rates countries actually charge, because we run a small trade deficit with them, and if trade deficit/imports is less than 10%, Trump just listed their tariff rate as 10%.
19/22
@0xKingAlex
This is pure cope. The chart includes tariffs and non-tariff barriers, VATs, currency manipulation, import bans, regs, etc.
You’re pretending it’s just deficit math to gaslight. It’s not. It’s reciprocity.
If they tax us 40%, we tax them 40%. Simple.
20/22
@JamesSurowiecki
Will you stop? They're not taxing us 40%. That's an imaginary number. The "tariff rates" in that chart are literally just our trade deficit in goods with a country/our imports from that country. They don't reflect actual tariffs + non-tariff barriers.
21/22
@wightmanr
Hrm... not disagreeing that the rates are fake / nonsense... but feels more arbitrary than suggested. EU for instance, the trade imbalance is only ~3% of the total trade if you factor in goods and services. The 20% seems closer to the VAT, which is also completely moronic to consider a tariff given that it applies to foreign and domestic goods equally... I think the average tariff rate in both directions up until now was about 1% in both directions.... regardless, WTF, where are the adults in the room?
22/22
@JamesSurowiecki
As I said later in the thread, they ignored services when calculating the "tariff rates." They only looked at goods.
To post tweets in this format, more info here: https://www.thecoli.com/threads/tips-and-tricks-for-posting-the-coli-megathread.984734/post-52211196
I'm wondering if I should just go ahead and pay that off
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