Free Traders Case For Tariffs

[RocksInMyHead]

how is it OK for the EU to impose a 10%+ (VAT and duties as well) tariff on our cars, while we impose a 2.5% tariff on theirs?

We impose a 25% tariff on light trucks - which is why we don't see vehicles like the VW Amarok or Toyota Hilux in the US. We do this, in part, to protect the US pickup industry. And most vehicles made in the US, Europeans don't really want. Full-size pickups and SUVs just aren't practical there due to space and fuel economy. Cars from US automakers that Europeans do want, they make there because those models don't sell well enough in the US. Just like a lot of European automakers have manufacturing plants in North America for the models primarily sold here (e.g. BMW's Spartanburg, SC plant, which makes most of their SUV models).

 

[FreeinChrist]

Trump Tariffs Live Updates: U.S. Markets Plunge From Shock of Tariffs

Stocks tumbled in the U.S., Asia and Europe. Allies and adversaries alike were weighing their responses.

www.nytimes.com

Updated

April 3, 2025, 1:02 p.m. ET28 minutes ago​

Ana SwansonAlan RappeportTony Romm and Matthew Mpoke Bigg​

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Here’s the latest.​

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Wall Street fell sharply on Thursday, after a slump in global markets in response to President Trump’s major round of tariffs on U.S. imports. Officials from the world’s biggest economies reacted swiftly to the new levies, a significant escalation of trade tensions with the United States, and some countries warned of retaliation.​

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The S&P 500 tumbled more than 4 percent, a huge daily drop for the index, echoing sharp declines in Asia and Europe as investors balked at the tariffs. China vowed to take countermeasures to “safeguard its own rights and interests.” Its state media described the tariffs as “self-defeating bullying.”​

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[RocksInMyHead]

the link also doesn't account for Vietnam's VAT and other fees

but my purpose was to simply explain the rationale of the new tariffs. I never said a bad actor was "anyone who runs a trade surplus with the US", nor did the administration. So stop putting words in my mouth

The formula used for calculating the tariffs is given here:

Reciprocal Tariff Calculations

Executive Summary 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...

ustr.gov

Note that the two additional parameters (elasticity and passthrough - which are meant to account for things like VAT, fees, etc), with the values that the administration chose to set, cancel each other out. 4 * 0.25 = 1

What this means is that the tariff rate is, functionally, calculated by dividing our trade deficit with a country by the value of goods that we export to them. So, therefore, if you state that the purpose of these tariffs is to punish "bad actors," then it would appear that the only requirement that a country needs to meet in order to be labelled a "bad actor" is to run a trade surplus with the United States.

 

[loveofourlord]

We are running a 1.3 trillion dollar trade deficit

pretty sure that is a "failure" on our side

all the gaslighting about more efficient manufacturing, less people needed, whatever, is irrelevant. These are the numbers

your understanding of economics leaves much to be desired. AGAIN

, canada is 1/8t the size, but spends 10X's more then the US per capita. That trade deficit is 123b illion to around 100 billion even with the US being bigger, your lucky we spend that much. yet your complaining that a smaller country doesn't buy as much as you guys. what you expect canada to do increase how much stuff we need, thats not how economics works.

 

[essentialsaltes]

<Looks at the stock market>

Do tell.

There's the problem right there.

 

[stevil]

View attachment 363052

This chart is incorrect. Either Trump's staff are incompetent, or they are outright lying to the USA public.
NZ do not impose a 20% tariff on any USA products.
I have read some economist's published articles, one person thinks maybe USA are counting our GST which is a 15% sales tax we put on all products and services sold in NZ not just imports but local products too, everything. Another economist thinks it is more likely that USA are considering the 20% trade deficit they have with NZ, basically we sell more goods to USA than what USA sell to us.

But NZ do not impose a 20% tarrif on any USA products,
Meanwhile USA already have large tarrifs on some of our exports, e.g. USA have a 19.6% tarrif on NZ dairy products. This new 10% blanket tarrif on all our exports to USA will be additional to already existing tarrifs. So NZdairy products will now have a 29.6% tarrif on them.

So it's marked on that chart as reciprocal tarrifs, which it's not, and the number that they are claiming as tarrifs on USA is an outright lie. NZ don't have any blanket tarrifs on USA products and we don't have any tarrifs on any USA products that come anywhere near close to 20%.

 

[RocksInMyHead]

Another economist thinks it is more likely that USA are considering the 20% trade deficit they have with NZ, basically we sell more goods to USA than what USA sell to us.

This is precisely it. The US has a $1.1 billion trade deficit with New Zealand. The total amount of goods that the US imports from New Zealand is $5.6 billion. 1.1/5.6 = 0.196.

New Zealand

New Zealand and the United States are partners in the ongoing Trans-Pacific Partnership (TPP) negotiations. In this negotiation, the United States is seeking to develop a high-standard, 21st-century regional trade agreement that will support the creation and retention of jobs in the United...

ustr.gov

See post #83 for confirmation that that's how the tariffs were calculated.

 

[stevil]

This is precisely it. The US has a $1.1 billion trade deficit with New Zealand. The total amount of goods that the US imports from New Zealand is $5.6 billion. 1.1/5.6 = 0.196.

New Zealand

New Zealand and the United States are partners in the ongoing Trans-Pacific Partnership (TPP) negotiations. In this negotiation, the United States is seeking to develop a high-standard, 21st-century regional trade agreement that will support the creation and retention of jobs in the United...

ustr.gov

See post #83 for confirmation that that's how the tariffs were calculated.

But why don't USA publicly state that this is why they are imposing tarrifs? Why do they lie and say NZ has these tarrifs on them? and say so they are doing reciprocal tarrifs? Who are they fooling? Their own largely uneducated, uninformed MAGA base?

 

[Belk]

But why don't USA publicly state that this is why they are imposing tarrifs? Why do they lie and say NZ has these tarrifs on them? and say so they are doing reciprocal tarrifs? Who are they fooling? Their own largely uneducated, uninformed MAGA base?

Have you meet our president?

 

[RocksInMyHead]

But why don't USA publicly state that this is why they are imposing tarrifs?

Because if they stated it plainly, people would realize how stupid it is.

Why do they lie and say NZ has these tarrifs on them? and say so they are doing reciprocal tarrifs?

Because Trump promised tariffs and convinced his followers that it was a good idea - and now they need to justify them. Or it could be that they asked ChatGPT what the best way to impose tariffs would be, and blindly followed it (no, seriously). Also, Trump has had an obsession with trade deficits since his first term, and sees them as a seriously bad thing. Trump being Trump, he doesn't particularly care about being precise or truthful in his language, so it doesn't really matter to him what he calls the "bad stuff."

Who are they fooling? Their own largely uneducated, uninformed MAGA base?

Uneducated, uninformed voters in general. They're not all part of Trump's base, if we're being fair.

 

[essentialsaltes]

Uneducated, uninformed voters in general. They're not all part of Trump's base, if we're being fair.

 

[stevil]

See post #83 for confirmation that that's how the tariffs were calculated.

From that
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.

These guys are insane, they don't seem to understand at all how international trade works.
Having a trade deficit just means that your people are buying more of their stuff than what their people are buying of your stuff.

Each trade deal is quid pro quo, meaning when NZ give USA something of value, e.g. milk, USA gives something of value back e.g. money.
So we give you $1 million worth of milk and you give us $1 million worth of money. Now, lets say NZ bought $500 K worth of whisky from USA, we get $500 K worth of whiskey and we give you $500 K worth of money.

All up USA has received $ 1 million worth of milk and $500 K worth of money, NZ have received $500 K worth of whiskey and $1 million worth of money. Everything is balanced.

Anyway, all this talk is just a distraction. I actually don't think the Republican team are this stupid. They just put out a false narrative about things, basically lie to everyone.

What actually is happening is that USA government promised to provide tax cuts, income tax cuts, (which mostly goes to the wealthy) and they need to make up that money from somewhere. So they come up with a scheme to get the money from tariffs and just use "reciprocal taxes" or "trade deficits" just as a weak excuse. The tariffs themselves end up being paid by the USA consumers, because the importers put their prices up, the wholesalers put their prices up and then the retailers put their prices up to recuperate these taxes.
So ultimately the consumers pay, and those consumers are mostly the poor to middle class, not the wealthy. So essentially the government is taking from the poor to middleclass and giving to the wealthy. And in the process creating inflation, harming international relations, harming the economies of all their trading partners.

The people that benefit are:
The super wealthy in USA
Putin/Russia, and other countries that aren't happy with the cohesive Western world doing their free trade and mutually benefiting each other.

 

[BPPLEE]

From that
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.

These guys are insane, they don't seem to understand at all how international trade works.
Having a trade deficit just means that your people are buying more of their stuff than what their people are buying of your stuff.

Each trade deal is quid pro quo, meaning when NZ give USA something of value, e.g. milk, USA gives something of value back e.g. money.
So we give you $1 million worth of milk and you give us $1 million worth of money. Now, lets say NZ bought $500 K worth of whisky from USA, we get $500 K worth of whiskey and we give you $500 K worth of money.

All up USA has received $ 1 million worth of milk and $500 K worth of money, NZ have received $500 K worth of whiskey and $1 million worth of money. Everything is balanced.

Anyway, all this talk is just a distraction. I actually don't think the Republican team are this stupid. They just put out a false narrative about things, basically lie to everyone.

What actually is happening is that USA government promised to provide tax cuts, income tax cuts, (which mostly goes to the wealthy) and they need to make up that money from somewhere. So they come up with a scheme to get the money from tariffs and just use "reciprocal taxes" or "trade deficits" just as a weak excuse. The tariffs themselves end up being paid by the USA consumers, because the importers put their prices up, the wholesalers put their prices up and then the retailers put their prices up to recuperate these taxes.
So ultimately the consumers pay, and those consumers are mostly the poor to middle class, not the wealthy. So essentially the government is taking from the poor to middleclass and giving to the wealthy. And in the process creating inflation, harming international relations, harming the economies of all their trading partners.

The people that benefit are:
The super wealthy in USA
Putin/Russia, and other countries that aren't happy with the cohesive Western world doing their free trade and mutually benefiting each other.

Trump's tax cuts benefited people of all incomes

Fact-checking Harris’s claim Trump tax cuts benefited the wealthy

Vice President Kamala Harris claimed in the debate with former President Donald Trump that his previous tax cuts and current tax policies are designed to help the wealthy. Here are

www.coloradopolitics.com

The Trump tax cuts did benefit the wealthy, but they also benefited nearly every American because they lowered taxes across the board. The rich benefited from Trump lowering the top marginal income rate in 2017, from 39.6% to 37%. For this year, that rate applies to income above $578,126 for a single taxpayer. Many high-income households also benefited from the corporate tax rate cut, the new break for businesses that file through the individual side of the tax code, and the increase to the exemption for the estate tax.

But the Trump tax cuts also lowered taxes for middle- and lower-income households, including by lowering income taxes for lower brackets, expanding the child tax credit, and doubling the standard deduction.

 

[iluvatar5150]

Trump's tax cuts benefited people of all incomes

Fact-checking Harris’s claim Trump tax cuts benefited the wealthy

Vice President Kamala Harris claimed in the debate with former President Donald Trump that his previous tax cuts and current tax policies are designed to help the wealthy. Here are

www.coloradopolitics.com

The Trump tax cuts did benefit the wealthy, but they also benefited nearly every American because they lowered taxes across the board. The rich benefited from Trump lowering the top marginal income rate in 2017, from 39.6% to 37%. For this year, that rate applies to income above $578,126 for a single taxpayer. Many high-income households also benefited from the corporate tax rate cut, the new break for businesses that file through the individual side of the tax code, and the increase to the exemption for the estate tax.

But the Trump tax cuts also lowered taxes for middle- and lower-income households, including by lowering income taxes for lower brackets, expanding the child tax credit, and doubling the standard deduction.

Doubling the standard deduction while eliminating the personal exemption hurt families who itemized and/or have lots of kids. For an individual who didn’t itemize, the swap was a small net positive, but as your deductions increased, the change became a net negative. This was compounded by the imposition of the SALT cap.

 

[stevil]

Trump's tax cuts benefited people of all incomes

Fact-checking Harris’s claim Trump tax cuts benefited the wealthy

Vice President Kamala Harris claimed in the debate with former President Donald Trump that his previous tax cuts and current tax policies are designed to help the wealthy. Here are

www.coloradopolitics.com

The Trump tax cuts did benefit the wealthy, but they also benefited nearly every American because they lowered taxes across the board. The rich benefited from Trump lowering the top marginal income rate in 2017, from 39.6% to 37%. For this year, that rate applies to income above $578,126 for a single taxpayer. Many high-income households also benefited from the corporate tax rate cut, the new break for businesses that file through the individual side of the tax code, and the increase to the exemption for the estate tax.

But the Trump tax cuts also lowered taxes for middle- and lower-income households, including by lowering income taxes for lower brackets, expanding the child tax credit, and doubling the standard deduction.

Out of all the money that is going to people based on this tax cut. How much of it goes to millionaires?

Then try to work out, out of all the tariffs placed on consumer goods, how much of that money in total comes from millionaire's pockets and how much comes from the poor to middle income earner's via having to pay for higher price goods?

I don't want percentages of each person's pocket. like 10% of a person that earns $40K is just $4K where as 10% of a person that earns $10 million is $1 million. It would take 25 poor people to get the same amount of money that 1 rich person gets.

So (i'm just making up numbers here), but if 90% of the tax cut money goes to the wealthy, and if 90% of the tariffs comes from the non wealthy do you see that this might be a problem? It would be taking from the poor and giving to the rich.
When you do tax cuts, you need to get the money from somewhere else.
This administration are trying to cut benefits from the poor, and are adding taxes that will be mostly bourne by the poor.
The wealthy are the people that are financially better off, getting the lion's share of the money, and not having to worry so much about regulations either, so their toxic waste can be dumped in rivers, lakes, or pumped into the air, this lowers cost from them and means more profit.

 

[BPPLEE]

Doubling the standard deduction while eliminating the personal exemption hurt families who itemized and/or have lots of kids. For an individual who didn’t itemize, the swap was a small net positive, but as your deductions increased, the change became a net negative. This was compounded by the imposition of the SALT cap.

Looks like he wants to do more to help the middle class and lower income families. I don't think this is feasible though

Trump's Latest Tax Plan: No Tax If You Earn Less Than $150,000 | Bankrate

President Trump wants to slash taxes for people who earn less than $150,000, according to U.S. Commerce Secretary Howard Lutnick.

www.bankrate.com

 

[Trogdor the Burninator]

Still just as relevant today...

 

[iluvatar5150]

Looks like he wants to do more to help the middle class and lower income families.

Levying a bunch of tariffs is a pretty stupid way to go about it.

 

[BPPLEE]

Levying a bunch of tariffs is a pretty stupid way to go about it.

Eliminating taxes isn't, if it was feasible

 

[civilwarbuff]

The tariffs are also indiscriminate and will suck thousands of dollars out of the pockets of ordinary Americans in order to pay for tax cuts for the wealthy.

Yawn......the same progressive leftist propaganda.....