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Trump's Non-Reciprocal Tariffs: An Act of Insanity [1]
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Date: 2025-04-04
Trump’s reciprocal tariffs are not reciprocal. Rather, they are used to punish the rest of the world in retaliation to what he says is their unfair treatment of the United States, and then use these punishing and insane tariffs to fund tax cuts for himself and his oligarch friends. In this diary, I explain just how the tariff rates were determined.
From the chart, the first column lists the country, and the second column the alleged tariff rate the foreign country imposes on the United States. According to the Trump administration, the rates included non-tariff costs imposed on the United States. Examples on non-tariff costs would be government regulations such as quality standards, administration fees, and licensing requirements. Thus, if the actual tariff imposed on the United States was 10%, and non-tariff costs increased another 5%, then the alleged actual tariff rate would be 15%. The Trump administration would then divide the 15% rate by 2 to charge the foreign country’s export a tariff of 7.5%. Because their is a baseline tariff of 10%, the Trump Administration would charge the foreign country’s export a 10% tariff.
However, Trump lied. If his administration really used this methodology to calculate tariffs, the resulting reciprocal tariff rates would be much lower. If the Trump administration insisted on a 10% baseline tariff, then most countries would face a 10% tariff on their exports to the United States. For example, the European Union (EU) charges an average tariff of 1.4%. The Trump Administration alleges that they charge a 39% tariff against the United States, and therefore will impose a 20% tariff on EU. Of course, most of us know that this is BS.
Trump believes that trade is a game played between nations. In his delusional mind. countries with trade surpluses are winners, and countries with trade deficits are losers. Thus, in his mind, the United States is a loser because it runs trade deficits with most of the countries in the world. In reality, the United States runs trade deficits because it is wealthy, and can buy goods and services from other countries. Thus, Trump’s tariffs on a country’s exports is based on how large the United States trade deficit is with that country.
The Trump tariff is half of the US trade deficit divided by the foreign countries total exports to the United States. However, regardless of the trade deficit or surplus the United States has with the country, the baseline tariff is 10%.
Thus, tariffs were determined by the equation:
If (1/2)*(Trade Deficit/Foreign Country’s Export)*100 <= 10%
Tariff = 10%
If If (1/2)*(Trade Deficit/Foreign Country’s Export)*100 > 10%
Tariff = (1/2)*(Trade Deficit/Foreign Country’s Export)*100
Using this formula, US tariffs is going to be highest its been since 1910, before the progressive income tax was implemented. According to Fitch Forecast, the effective tariff on US imports will hit 22% this year.
The fact that the 22% effective tariff rate will be the highest rate since before the progressive income tax is no coincidence, many conservatives hate progressive income taxes because it redistributes income from high income to lower income people and families. Trump claims that these tariffs will raise over one trillion dollars per year, offsetting what he hopes to be about one trillion dollars in tax cuts per year. But according to CBS News:
The U.S. imported about $3.3 trillion in foreign goods last year, according to the U.S. Bureau of Economic Analysis. The Peterson Institute of International Economics estimated that even if Mr. Trump were to apply a 50% tariff to foreign imports from every country — which exceeds his stated plans — it would generate at most about $780 billion annually.
To keep this in perspective, last year the United States generated 4.92 Trillion dollars in revenue, and spent 6.75 Trillion dollars, for a budget deficit of 1.83 Trillion dollars. Even if the tariffs did not send the economy into recession, the tariffs will not eliminate the budget deficit, and deficits could soar if tariffs do not raise as much revenue as expected.
There is no economic logic to Trump’s tariffs. He had no idea how the tariffs were going to be determined and implemented. Thus, there was probably some MAGA oligarch who came up with the simple formula to base each countries tariff rate on the trade deficit they had with the United States. Without much thought, the oligarch accidentally tariffed penguins on uninhabited islands. One can see that Trump’s policies are whimsical and made by decree on how he is feeling at the time.
According to top psychologist, John D. Gartner, Trump suffers from three major mental disorders; hyper-manic temperament, malignant narcissistic personality disorder, and dementia. His hyper-manic temperament explains his midnight tirades he has on Twitter (X). The whimsicalness of his policies may be a result of his hyper-mania and dementia, and his narcissism will never let him back down on a mistake he has made. Worse, he is surrounded by sycophants who worship him as a cult leader. Trumps insane non-reciprocal tariffs is just another reason why the resistance to MAGA America must grow.
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