Idiotic calculations stun economists

[struggle4progress]

Richard Partington
‘Willing sycophants’ came up with simplistic formula that has thrown global economy into disarray

Waving a big chart as a prop in the White House Rose Garden, Donald Trump suggested his new tariff plan was simple: “Reciprocal – that means they do it to us, and we do it to them. Very simple. Can’t get simpler than that.”

Perhaps a bit too simple. The method used to calculate the most important numbers in international trade, politics and economics has left some of the world’s leading experts shocked ...

For countries without a large deficit, the White House applied a 10% baseline, ensuring tariffs would be applied regardless. This was the case for the UK, which the US Census Bureau reckons had an almost-$12bn surplus in 2024.

“ quite an extraordinary calculation after months of work behind the scenes,” said Jim Reid, the global head of macro research at Deutsche Bank. “ didn’t add much confidence on there being an in-depth strategic implementation plan” ...

https://www.theguardian.com/us-news/2025/apr/03/trumps-idiotic-and-flawed-tariff-calculations-stun-economists

[struggle4progress]

1. How much will tariffs raise prices?

April 3, 20252:30 PM ET
Jeff Guo

... he has variously denied that tariffs would raise prices or has said that he "couldn't care less."

But according to Trump's math, the tariffs are supposed to raise prices. Because those higher prices are the driving force that will close the trade deficit ...

... these are very rough, back-of-the-envelope calculations. As laid out, this formula treats every trading partner, every good and every industry the same. Bananas, oil, clothing, computers or cars — it doesn't matter what a country sends to the U.S.

More importantly, the formula hinges on a big assumption about how much tariffs will raise prices. Trump's math assumes that only a quarter of the tariffs would be passed onto American consumers in the form of higher prices. But economists who have studied Trump's tariffs in 2018 — on steel and aluminum and various products from China — calculate that almost all of those tariffs ended up being passed onto Americans ...

https://www.npr.org/2025/04/03/g-s1-58094/tariffs-price-raises-economists

[Walleye]

2. Trump's only pleasure comes from forcing people to do things against their will

He only thinks of people as things to be pushed around. He doesn’t care if it’s rape or trade policy as long as he is forcing people

[Johnny2X2X]

3. The idiocy of it all is helping drive the sell off

Investors have no faith in the amateurs running things anymore.

And a recession is guaranteed now as consumers are going to stop spending.

[struggle4progress]

4. Biggest policy mistake in 95 years

Jeremy Siegel, professor emeritus of finance at University of Pennsylvania’s Wharton School of Business and Wisdom Tree chief economist, joins 'Squawk Box' to discuss the fallout from President Trump's sweeping new tariff policy, what investors should do with their portfolios, impact of retaliatory tariffs, why having a trade deficit isn't a bad thing, and more.

[LetMyPeopleVote]

5. John Oliver explains trump's tariff formula

Link to tweet

John Oliver: "[Trump's chart] features an estimate of 'Tariffs Charged to the USA' by other countries that nobody could figure out, until a financial journalist realized it was just how much we export to that country, minus how much we import, divided by how much we import."