I’m going to be scathing in my critique because these people are both dishonest and incompetent and deserve to be called out on it.
Here’s their formula:
It’s a ridiculously simplistic formula.
First, a stylistic quibble. What is up with those asterisks in the denominator? I’ll give the authors the benefit of the doubt and assume that they wanted the formula to be understandable by people who aren’t familiar with standard math notation, in which the juxtaposition of variables indicates multiplication. But to see it written that way in an official document is just… weird.
The i subscripts in the formula just indicate that the formula is to be applied to one country at a time — country i. I’ll therefore omit the ‘i’s from the rest of the discussion.
∆𝜏 is the amount by which the tariff currently being placed on that particular country should change (according to the Trump administration bozos) in order to drive the bilateral trade deficit to zero. In other words, 𝜏 (the existing rate) + ∆𝜏 (the change in rate) would be the correct final rate (according to the formula) to achieve the dubious goal of a trade balance.
The inanity of insisting on bilateral trade balances
We’re off to a bad start already, because the notion that every bilateral trade deficit should be zero is ridiculous on its face. Let’s look at a simplified example. Suppose Malawi sells us only mangoes, and the US (henceforth ‘we’, since I’m American) sells them only air conditioners. In order for the trade deficit to be zero, we need to buy the same dollar amount in mangoes that they buy in air conditioners, and we should adjust the tariffs we impose on Malawi until that happens. Why is this desirable? Why should the amount of mangoes be linked to the amount of air conditioners? Who the hell knows? It’s just Trump’s idiotic obsession, and it makes no sense.
To make the stupidity even more obvious, think of an analogous situation. Ernesto sells tacos from a taco truck, and George runs a landscaping business. George occasionally buys tacos from Ernesto, and Ernesto hires George to mow his lawn. Suppose Ernesto pays more to George each month than George spends buying tacos from Ernesto. Is Ernesto being cheated? Is he subsidizing George? No and no. George gets every taco he pays for, and Ernesto gets his lawn mown on schedule. It would be ridiculous to say that either of them is being cheated, and ridiculous to say that the goal should be to make the amounts even.
Why is Trump obsessed with trade deficits? It’s because he is confused enough to believe that the existence of a bilateral trade deficit — a trading deficit with a particular country, Malawi in my example — means that they are cheating us and that we’re subsidizing them. He actually believes that we are just handing over the money, getting nothing in return. In reality, we get every frikkin’ mango we pay for, and they get every air conditioner they pay for. No one is being cheated, and to demand that the dollar amounts should match is idiotic and pointless.
Trump actually declares in his executive order that trade deficits are a “national emergency”. He does this because he doesn’t have the authority to impose tariffs unless it’s a national emergency. Otherwise, the job falls to Congress, where it belongs. Trump is lying about the supposed national emergency.
The formula
According to the USTR statement, the x in the formula is the dollar value of what we export to a particular country, while m is the dollar value of what we import from them. The numerator, x – m, is therefore equal to the trade imbalance. If x is bigger than m, then the difference is positive, and we are running a trade surplus. If x is less than m, then x – m is negative, and we have a trade deficit. But note that they have it backwards in the formula: it should be m – x, not x – m. Why? Because the denominator is positive. If both the numerator and denominator are positive, as they would be in the case of a trade surplus, the formula would deliver a ∆𝜏 that is positive. In other words, the formula as written would actually increase the tariffs for the countries with whom we have a trade surplus, and it would decrease the tariffs for countries with whom we have a trade deficit. The formula therefore punishes the (supposedly) good guys and rewards the (supposedly) bad ones, which is opposite to the administration’s intentions. One more indication of their clown car incompetence.
They could easily have corrected the formula if they were aware of the error. Just put a negative sign in front of the formula, or swap x and m, or redefine x and m as the amounts exported and imported by the other country, instead of the amounts exported and imported by the US. Any one of those three would fix the problem, but no.
Let’s assume that we have corrected that mistake for them and that the numerator now equals the amount of the trade deficit, not the surplus. What about the denominator? Well, it just so happens that the values they chose for 𝜀 and 𝜓 are 4 and 0.25, respectively. Those multiply to 1, thus canceling each other. How convenient. These charlatans actually and blatantly chose the values so that they would cancel out, instead of using the most accurate numbers they could find in the literature. They cheated.
After that suspiciously convenient choice of parameters, the formula is now just ∆𝜏 = trade deficit divided by total imports:
Do they actually apply this formula? No. They massage its output even more. They divide ∆𝜏 by two, for no good reason. That means that for the formula to match the actual tariffs, they should multiply the denominator by 2. They fail to do that, as you’d expect. Why 2? My hypothesis is that even those dunces realized that the numbers they were getting from the formula were ridiculously large, and dividing by 2 was a way to get them down to a range that they considered reasonable. More number fudging with no theoretical justification.
Next problem: according to the corrected formula, ∆𝜏 should be negative in the case of trade surpluses. That is, we should decrease the tariffs on imports from those countries. If the existing tariff rate is small enough, it should even go negative, according to the formula, in order to balance our trade with that country. Trump doesn’t like that, so he has arbitrarily declared that everyone will pay a minimum of 10%, whether there’s a trade deficit or a trade surplus. In other words, the policy, which is already misguided, is also unfair — it says that it’s OK for the US to screw other countries by imposing high tariffs, even if they’re doing the “right” thing and allowing us to run a trade surplus with them.
The actual rates
Here are the charts spelling out the actual tariff rates.
The chart labels them “Reciprocal Tariffs”, but that is a lie, since the formula doesn’t take into account the tariff rate charged by the other countries on our exports to them. It’s completely missing from the formula. They aren’t reciprocal tariffs, they’re misguided tariffs in response to trade deficits, and they punish US importers instead of the countries selling us those goods and services.
The label on the middle column is wrong for the same reason, and it’s even further wrong because it depicts a bilateral trade deficit as a quantifier of “currency manipulation and trade barriers”, which it isn’t. We can run a bilateral trade deficit for no other reason than that Americans want more of what the other country is selling us than they want from us. That’s not “currency manipulation and trade barriers”, and the Trump administration is dishonest for trying to sell it that way.
The numbers in the middle column are apparently those that come straight out of the formula. You can tell, because the tariffs that are actually being imposed by the US are just the middle column divided by 2. That’s the arbitrary factor of 2 I mentioned above. The only exceptions are in those cases where dividing by 2 would leave a less than 10% tariff, in which case the tariff is set to 10%. Gotta make sure that everyone gets screwed at least that much.
The US Trade Representative’s explanation
Now some excerpts from the USTR statement. The very first paragraph:
Reciprocal tariffs are calculated as the tariff rate necessary to balance bilateral trade deficits between the U.S. and each of our trading partners. This calculation assumes that persistent trade deficits are due to a combination of tariff and non-tariff factors that prevent trade from balancing. Tariffs work through direct reductions of imports.
Well, duh. The phrase “tariff and non-tariff factors” covers literally every possible factor in the entire world. Yes, there are actual reasons that we buy more in mangoes from Malawi than they buy from us in air conditioners. Therefore we should conclude that we’re getting ripped off?
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.
Not by any reasonable person. You need to do the homework before making policy decisions that will affect the entire world economy. If they want less of what we’re selling than we want of what they’re selling, that can lead to a trade deficit, independent of all the factors they list above.
This doesn’t mean that trade practices can’t be unfair, but it does mean that to assume something nefarious is going on merely because we’re running a bilateral trade deficit is stupid.
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.
No. If we like Malawian mangoes more than the Malawians like our air conditioners, nothing is broken. Nothing is unfair. No reason to blindly punish the Malawians. It just means that American demand for Malawian mangoes is greater than Malawian demand for American air conditioners. No big deal.
A case could be made for nudging the US’s global trade deficit — which is the aggregate trade deficit we’re running with all of our trading partners put together — toward zero, but trying to eliminate every bilateral trade deficit is bonkers. These people are clueless.
Consider an environment in which the U.S. levies a tariff of rate τ_i on country i and ∆τ_i reflects the change in the tariff rate. Let ε<0 represent the elasticity of imports with respect to import prices…
Right there they say that ε < 0, but a few sentences later they assign it a value of 4. The last time I checked, 4 was greater than 0, not less. Their sloppiness is consistent, at least. What is wrong with these folks?
let φ>0 represent the passthrough from tariffs to import prices, let m_i>0 represent total imports from country i, and let x_i>0 represent total exports. Then the decrease in imports due to a change in tariffs equals ∆τ_i*ε*φ*m_i<0. Assuming that offsetting exchange rate and general equilibrium effects are small enough to be ignored, the reciprocal tariff that results in a bilateral trade balance of zero satisfies:
As noted earlier, they have the numerator backwards. It should be positive for a trade deficit, not negative, in order for ∆𝜏 to be positive, which represents an increase in tariff rates.
To calculate reciprocal tariffs, import and export data from the U.S. Census Bureau for 2024. Parameter values for ε and φ were selected. The price elasticity of import demand, ε, was set at 4.
Which inside the Trump administration is less than 0, lol. And how convenient that εφ multiplies to 1, as noted above.
Recent evidence suggests the elasticity is near 2 in the long run (Boehm et al., 2023), but estimates of the elasticity vary. To be conservative, studies that find higher elasticities near 3-4 (e.g., Broda and Weinstein 2006; Simonovska and Waugh 2014; Soderbery 2018) were drawn on. The elasticity of import prices with respect to tariffs, φ, is 0.25.
It wasn’t to be conservative. It was to fudge the numbers so that the product εφ came out to be 1. And picking a value of 4 for elasticity isn’t “being conservative” in the sense of “this value is more likely to be correct”. It’s conservative in the sense of “we’d better make this number big because otherwise the tariffs will be so outrageously huge that everyone will see that we’re idiots.”
Think about it. They want φ to be small (whether or not the evidence supports it), because they want to maintain the fiction that other countries will mostly absorb the tariffs and that importers and retail customers will shoulder less of the burden and therefore experience less inflation. On the other hand, a small φ balloons the value of ∆𝜏 to ridiculous levels. So they set 𝜀 to 4 to bring ∆𝜏 down, even while acknowledging that the true value of 𝜀 is closer to 2.
The recent experience with U.S. tariffs on China has demonstrated that tariff passthrough to retail prices was low (Cavallo et al, 2021).
I haven’t verified that, but either way I would sure like to see the actual number. Why didn’t they include it? Is it really 0.25? In any case, the question of pass-through to retail prices is irrelevant when you’re trying to determine which country is absorbing the cost of the tariffs. It’s the pass-through factor to importers that is relevant, and that is close to 1, even if the pass-though to retail customers is less. That means that US importers are bearing the cost of the tariffs and passing some of that cost on to consumers. It’s inflationary, and it’s a tax by the US government on US importers, not a tax on foreign countries. Which contradicts Trump’s whole rationale.
The reciprocal tariffs were left-censored at zero.
No, they were “left-censored” at 10, as you can see by looking at the charts. 10 is the minimum tariff you’ll see in the third column of the charts.
Higher minimum rates might be necessary to limit heterogeneity in rates and reduce transshipment.</p
No explanation of why “heterogeneity in rates” is to be avoided, and no comment on the fact that it isn’t avoided, given the large range of new tariff rates in the third column of the charts. That means there’s still plenty of incentive for transshipment. Take Vietnam, for instance, with a new rate of 46%. There’s a *lot* of incentive for them to transship through one of the countries with a 10% rate.
Tariff rates range from 0 to 99 percent.
There is no inherent limit. Tariffs could be 100%, 180%, or 2100%. 99% is an arbitrary limit. Tariffs could even be negative in a perverse world, in which case the government would be giving importers a bonus for importing more and nudging us toward a trade deficit. Obviously that wouldn’t happen in practice, but my point is that the 99% is arbitrary, and anyone who thinks tariffs are limited to being less than 100% doesn’t understand tariffs.
The unweighted average across deficit countries is 50 percent, and the unweighted average across the entire globe is 20 percent.
It’s pointless to state the unweighted average. An unweighted average is really just a weighted average with all of the weights set to 1. That gives Liechtenstein equal weight with China, which is stupid. Our trade volume with China is some 1,770 times as great as our trade volume with Liechtenstein, but these geniuses are weighting them evenly and presenting the average as if it had some kind of significance. Morons.
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.
Here, they tell us that the import-weighted average of tariffs is 41 percent. Combine that with their assumed pass-through rate of 0.25. meaning that exporters in other countries will shoulder 75% of the tariff burden. That’s unrealistic and it clashes with the actual data, but even if you take the Trumpers at their word and assume that only 25% of the additional cost due to tariffs is passed to importers, that’s still over 10%, because 0.25 * 41% is greater than 10%. 10% import inflation! So much for Trump’s campaign promise: “I’ll reduce prices on day one.” Idiot.
Good job, Trump supporters. By voting for him, you put power in the hands of these dishonest and incompetent economic doofuses.
🙋♂️
The best (or at least most convincing to me) explanation I’ve seen is that Trump erects all these trade barriers for the sheer pleasure of having world leaders from everywhere come to kiss his ass and grovel. And he changes his tariff rates back and forth unpredictably (and irrationally) because he revels in the sheer power he can exercise jerking the markets around.
The OP is Keiths’s critique of at least one rationale the White House has concocted to “explain” what is nothing more than Trumps juvenile emotional gratification. But ANY rationale cannot be more than an excuse for what is nothing more than Trumps delight in getting lots of attention by breaking things just because he can. And it won’t stop at least until enough Republican politicians decide that their district doesn’t have enough Trump worshipers to keep their seats. I don’t think we can count on any help from them otherwise, and certainly not from SCOTUS either.
Corneel,
If you think I came from the Trump Administration, I am never returning here!!
😡
I don’t think he meant it that way. Rather, this thread exists to discuss Trump’s follies, and that’s why old faces are showing up again.
All we need now is Joe G, nonlin and J-Mac to put the pro-Trump case. I know where phoodoo would sit.
To whom it may concern,
This site is hosted by a UK server and I can say with confidence that the owner supports the free exchange of ideas. We will guard our members rights to the death!
Walto, you are safe here.
Wasn’t there some connection with China? I wonder if he might not be a bit conflicted
Joe popped into a Facebook group (on ID but nothing like the old days) I happened to be commenting in. He fired off a few of his signature mantras but said he was spending more time with family and much less on line.
I saw this archived Washington Post story in a thread at Peaceful Science (the commenter credited Panda’s Thumb but I can’t spot the reference).
Worrying if true
He was strongly anti-Republican, as I recall. But something to do with rice in the day job.
Alan Fox,
Bad link!
Allan Miller,
Oops. hrf not href. Works now.
ETA Michael Wong’s Bluesky profile
I think walto was just pulling my leg, but thanks 😉
And since you are a mathematician: asterisks instead of multiplication signs. That is a capital offense, right?
Corneel,
I think mathematicians just put the numbers next to each other and let them sort it out among themselves.
It’s an indication that they are way out of their depth.
Alan, re phoodoo:
Allan:
He said he was a professional athlete and that he lived in Japan. He never specified which sport, but I liked to picture him as a sumo wrestler.
Flint:
He certainly revels in it, as this nauseating video demonstrates.
Allan:
This is a guy who believes that magnets don’t work underwater, that passing a dementia test is a sign of genius, that Haitian immigrants are eating American pets, and that the existence of phone apps is known to only a select few. A guy who hired an anti-vax crackpot to run HHS (hi, J-Mac!) and who recently added the arcane word ‘groceries’ to his vocabulary.
Forget about four-dimensional chess. One-dimensional chess is above Trump’s pay grade.
Allan:
And comparative advantage, which doesn’t produce bilateral trade balance but is a key contributor to the benefits of international trade.
Allan:
petrushka:
US trade with Russia: $3.5 billion
Trump tariff on Russia: 0%
US trade with Ukraine: $2.9 billion
Trump tariff on Ukraine: 10%
You were saying?
He also has no idea what a tariff is, (he thinks other countries pay his tariffs), and would probably lose sleep worrying about the trade deficit he’d have with his grocery store, if he knew what groceries are.
I think balance of trade is simply the wrong dimension for the argument.
Certainly Germany’s reliance on Russian gas was economically favorable for both countries.
Presumably, any free trade is beneficial for both parties. Tariffs distort free trade, which is why economists keep telling us that they are bad for everyone. In theory, specific and temporary tariffs can stick a foot in the door for fledgling industries or technologies. In practice, tariffs are an ill wind that blows nobody good. But Trump has created a wind far more ill than normal, hurting everyone extensively and deeply, without even a coherent rationale or goal. Right now it’s not the tariffs that are the problem (there is no system in place to even assess or collect them, which would take months to construct) so much as the global inability to plan or invest because nobody knows what Trump will do tomorrow – not even Trump!
Neil Rickert,
I was joking, Neil!
The best way I can personally describe Trumps tariffs is this:
You overspend on your credit, like your credit card or a line of credit. Then when you realize that, you go to people you had spent “your money” at and say you ripped me off. Pay back!
Trump has been and is delusional but he at least is trying to clean up the ocean of some dirt…
The US spending is out of control and Trump is not going to stop it… a global recession may but more likely a depression which usually follows by a Global WW…
It is exactly how Trump has framed it. That is precisely what the equation in the OP is aiming for: the tariff rate that would balance trade (arbitrarily, just for countries where the figure exceeds 10%). Of course it’s also about fentanyl, punishment, revenue raising, victimhood, grievance, or whatever else pops into Trump’s head, to be echoed enthusiastically by his hordes on the ‘net and Fox.
In the OP, I commented on the passthrough number of 0.25 that the Trump administration uses in its formula:
They cite a paper by Cavallo et al in support of that 0.25 number. Today I ran across an interview with Brent Neiman, one of the coauthors of the paper, who said he has no idea where the Trumpers got the 0.25 because it appears nowhere in the paper. He also said that the number he would have used (if you ignore the fact that the entire premise of the formula is bogus) was 0.95, almost 4 times as large.
In other words, even if you were to grant the validity of the administration’s bogus formula, the tariffs they’re charging are 300% greater than they should be. Vietnam’s 46% should really be 12%.
Idiots.
keiths,
I read somewhere that only a handful of countries would exceed 10% using 0.95. GIGO.
Allan:
It’s true. 0.95/0.25 = 3.8, so any country with a Trump tariff of 38% or less would have its tariff “corrected” to 10%. Among the countries listed on Trump’s charts, only six exceed that 38% threshold.
Even evil Cambodia, the worst “offender” of the bunch, would only pay 12.9%.
Of course, if those charlatans actually switched to Neiman’s value of φ=0.95, they would probably just chop ε down to 1.05 to make εφ equal 1 and satisfy their weird unitary fetish, leaving the tariffs unchanged.
Fuck yeah! Walto and Joe are back!
I just noticed something: the Cavallo paper mentioned in the USTR’s explanation is missing from the list of references at the end, and there is an extra reference in the list (Pujolas and Rossbach 2024) that is mentioned nowhere in their explanation.
What’s going on here? Just more sloppiness? Do they not want us to read the paper where they supposedly got the 0.25 number? Is no one in the USTR office capable of proofreading? Did they pull an all-nighter trying to crank this out after a snap decision by their impetuous boss the night before? Are there no grownups left in the USTR office?
BTW, they moved the explanation here.
Haha. Now I can see why they removed any reference to the Pujolas and Rossbach paper. It states:
In other words, P&R are saying that by trying to eliminate bilateral trade deficits, Trump is shooting himself in the foot and making his tariffs less beneficial. Not that his “deficit bad, surplus good” brain will ever be able to grasp their reasoning, of course.
Other choice quotes from the paper:
And:
The algorithms have been watching me and are now serving up stuff like this:
Nobel Prize-winning economist Joseph Stiglitz on Trump’s tariffs
With thorough rigour, you have fully succeeded in dismantling the bogusness of Trump’s tariffs. But this slapfest of tariffs is not (only) about tariffs. It’s about disrupting just for the sake of disrupting, worldwide because why not. It is obvious that there is no intellectual basis for Trump’s tariffs, because Trump is not playing an intellectual game at all, never did for a second. (Whenever Trump says “smart”, it means something else. He has no actual clue what “smart” is.)
Trump’s administration is by now a literally bloody dictatorial regime. See their deportations. “Sloppy” does not even begin to cover it, just as with DOGE’s dogeing. It’s outrageously unconstitutional and illegal in every way. They little care about proofreading (nobody can count the times they have said – in print – “illegal aliens” about legal migrants and refugees with protected status). They are even able of reading a SCOTUS decision that is 9-0 against them as if it were in their favour.
I’d say that’s the most worrying thing. There appears to be nothing preventing the transition into autocracy and totalitarianism.
keiths,
You have made a big claim here. I am not sure you made any real case against their model as it has to be tested empirically before we know if it is helping balance trade. At the end of the day it will take years to measure the effect.
There is no such thing, empirically, so there is nothing to test. If you think there is, then you failed the sanity test.
Erik,
Trade balance 2024 vs trade balance 2027. How would this not test the new model?
And if nobody has money to import stuff come 2027, you will claim it was a big success. But let’s face it, you’re a braindead cultist, so you will say that no matter what
keiths,
I know nothing about politics nor about the finance…
To me Trump is either not understanding the reality of the finance world, or he can’t or is not allowed to think in these terms. For example, If I overspend on my credit cards and can’t pay it back, why would I blame the stores or business that I have business with?
After I realize I have overspent, why would I as all the stores who I have been dealing with to pay back because of my unconscious overspending?
To me the military industrial complex is the problem #1 and DoD…who pushed for countermeasures against flu??/
The perfect trade balance that Trump is aiming at is no trade. And historically, this is what tariffs are for: To *block* trade, to make it unfeasible. Since it is insane to block *all* trade, real-life tariffs are always moderate, tops 10%, and targeted at a few specific commodities.
Blanket tariffs the way Trump is doing them are always deemed trade war which, again historically with high reliability, becomes a real war. What Trump is doing is insane and absolutely indefensible. And to flip back and forth between blanket tariffs and the next day no tariffs is a sure sign of madhouse madness, no plan, no clue, no thought process, just a childish joy of toying with World War III.
Ridiculous that I have to explain these obvious things that everybody knows and much of which has been already explained in the OP and in other comments.
Edit: In short, “balanced trade” is not some economic virtue to be had for its own sake. But enough explaining. This topic is clearly far over your head.
Hi Bill. Aren’t you worried about your day-to-day expenses going up quite a lot? After all, it is you that will be paying those excessive tariffs, not the countries that are targeted.
colewd:
We already know their model fails, and it took only days to find out. Among its many flaws, it assumes that our trading partners won’t retaliate when le crétin orange starts jacking up their rates. But of course they do retaliate, with China being a dramatic example. The Chinese are now charging 125% on US imports. The model fails to account for that and a dozen other factors influencing the trade balance. It ain’t just tariffs.
Their model sucks, but even if they had a good model, it wouldn’t change the fact that the goal they’re aiming for — the elimination of all bilateral trade deficits — is a stupid one. Did you understand my Ernesto/George example in the OP?
Ernesto is running a bilateral trade deficit with George, but that’s fine. It’s normal, it’s healthy, and there’s no reason to change it.
I broke a tooth and paid my dentist a lot of money to replace it with an implant. He has never bought anything from me. Am I being ripped off? Should I spend time trying to sell him things in order to balance our trade accounts? It would be moronic, but that is exactly what Trump is doing, just on a national rather than an interpersonal scale.
I’m so old I remember when Milton Friedman was making these arguments. As I recall he was labeled a conservative.
He had other crazy ideas, like replacing welfare with a negative income tax.
Maybe beside the point, but some Chinese manufacturers are starting to sell designer clothing (shoes, handbags) directly, without the European designer logo, for one-tenth the price. Not copies or knockoffs. Turns out they have always been made in China.
I’m so old I can remember when we had Japaneses junk in dime stores. Then Nikon happened. Funny thing. When I bought a car six years ago, I wanted one manufactured in Japan, not just one having a Japanese name. When the entertainment system was flagged as having a higher than expected failure rate, they extended the warranty to eight years.
Corneel,
Hi Corneel
It depends on the individual and long vs short term thinking. I personally don’t believe any of us can make a solid prediction here as the model has human uncertainties in it as Keiths mentioned. I do believe that governments around the world can improve their efficiency and long term this will improve our standard of living. The US balance of trade problem is real and needs to be addressed. Warren Buffet wrote a paper on this issue in 2003.
I have briefly looked at the economic models around trade and they don’t consider supply side issues.
Oh. it must be great living in a country where they get to test out economic theories in real time. And if it fails? Oopsie… our bad.
Some people (not you, obvs) are capable of looking at a notion and saying “that’s just fucking stupid”. But no, we’ve got to wait years to see if it’s fucking stupid or not.
The Trump Formula cannot test this, since it has a floor of 10% even with countries with whom you operate a surplus. If the correct parameters are used, only 6 countries rise above 10%.
Argumentum ad hominem, now? I’m old enough to emember when you used to argue quite sensibly.