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Genuine questions: why are they calling it “reciprocal”? Is the US just matching the tariffs set by the other countries? Also, this announcement has wiped out

Genuine questions: why are they calling it “reciprocal”? Is the US just matching the tariffs set by the other countries? Also, this announcement has wiped out any plans of buying tech products this year, plus a holiday to the US and Canada later in the year. Good thing too, as the entire globe is probably staring down the barrel of a recession.

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ModernMech 1y ago
Because when the blowback comes, people will be looking to cast blame for starting this whole trade war, and when that time comes Trump will point to the word "reciprocal" and say "we didn't start this, we were only reciprocating".
gjsman-1000 1y ago
> Is the US just matching the tariffs set by the other countries? No. Trump claims that the new tariffs are a 50% discount on what those countries tariff US goods at. (Even if that's questionable - is VAT a tariff?) If he's correct, or anywhere close, this is a "tough love" strategy to force negotiations. We'll see how it goes. It also plays to his base - why should we tariff any less than they do us? And they have a point, it's the principle of the thing.
- f33d5173 1y ago
  It's so quaint to me that people actually believe his rhetoric. How long do you think people will put up with high prices before they turn on him?
  - barbazoo 1y ago
    If high prices are inevitable, what’s their endgame? Are they actually incompetent or are people too pessimistic about what they’re attempting to do?
    - f33d5173 1y ago
      Prior to yesterday's announcement, the claim regarding tarrifs was that the goal was to bring manufacturing back to american soil. This is unlikely to happen in any case, but it requires at minimum that consumers put up with high prices for a while (with "a while" being measured in years, if not decades). Actually, the "liberation day" tarrifs strongly agree with this goal: after speculation, the administration announced the formula for these new tarrifs, which has nothing to do with counter tarrifs or trade barriers as claimed, and instead comes from a ratio of the trade deficit in goods and the overall amount of trade. In other words, countries that export a lot of goods to the US (and the US doesn't have commensurate goods exports to) get high tarrifs. This makes sense if the goal is to incentivize manufacturing in the US, by making manufactured goods from outside more expensive. There is another camp that thinks that trump doesn't really have a goal per se, and is rather doing all this as an exercise in showing off his strength and to draw attention to himself. This camp holds that eventually trump will get bored, or the public will turn on him, and he'll need to get rid of tarrifs to save face. We call these people "optimists".
- cldellow 1y ago
  > If he's correct He's not. According to [1], the White House claims Vietnam has a 90% tariff rate. According to [2], 90.4% is the ratio of Vietnam's trade deficit with the US -- they have a deficit of $123.5B on $136.6B of exports. The same math holds true for other countries, e.g. Japan's claimed 46% tariff rate is their deficit of $68.5B on $148.2B of exports. The EU's claimed 39% tariff rate is their deficit of $235.6B on $605.8B of exports. Who knows, maaaaybe it just so happens that these countries magically have tariff rates that match the ratio of their trade deficits. Or maybe, the reason Vietnam doesn't buy a lot of US stuff is because they're poor. The reason they sell the US a bunch of stuff is because their labour is cheap to Americans. (They do have tariffs, but they're nowhere near 90%: [3].) America's government is not trustworthy. Assuming that what they say is truthful is a poor use of time. [1]: https://x.com/WhiteHouse/status/1907533090559324204/photo/1 https://x.com/WhiteHouse/status/1907533090559324204/photo/1 [2]: https://ustr.gov/countries-regions/southeast-asia-pacific/vietnam https://ustr.gov/countries-regions/southeast-asia-pacific/vi... [3]: https://www.investmentmonitor.ai/news/vietnam-gives-us-tax-breaks-ahead-of-tariff-announcement/?cf-view https://www.investmentmonitor.ai/news/vietnam-gives-us-tax-b...
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- rsynnott 1y ago
  > If he's correct Trump is not in the business of being _correct_, or indeed caring about correctness as a concept. And no, these are, obviously, not the actual tariffs, don’t be silly.
graeme 1y ago
Someone calculated the formula used. They divided the trade deficit of each country by total trade of each country and assumed that was all a tariff. So for example Indonesia and the US traded $28 billion. The US has a 17.9 billion trade deficit with Indonesia. 17.9/28 =0.639, or 64%, which is assumed to be all caused by tariffs. So they divide by two and impose 32%. Anyway no the US isn't matching tariffs they're dramatically exceeding them.
- tim333 1y ago
  That's a bit of a messed up way to calculate things. I also think the US deficits are hugely overstated because much of what the US produces is intellectual capital rather than physical goods and the profits are made to appear in foreign subsidiaries for tax reasons. Like if I buy Microsoft stuff in the UK, Microsoft make out it was made in Ireland for tax purposes, but really the value is created in and owned by the US. The US company both wrote the software and owns Microsoft Ireland. So much of the perceived unfairness Trump is having a go at isn't real.
  - peterbecich 1y ago
    You raise an excellent point that US corporate tax evasion is exaggerating the trade deficit. However, from the perspective of winning US elections, I think it does not change the issue that the trade deficit falls more on de-industrializing Midwestern states, and the corporations you are referring to are concentrated in Northeastern and Western states. Secondly, if Microsoft or Apple makes the profit appear in Ireland, it cannot move that money back to the domestic US, right? So as long as the money sits overseas, it would not count towards US trade and thus the deficit calculation is fair.
    - oezi 1y ago
      They don't move the profit back to the US, but through Ireland and the Netherlands they move it out of the EU mostly to some tax havens in the Caribbean. From there they use them for their stock buybacks, which I think equals mostly flowing back into the US.
tootie 1y ago
It's just spin. The new duties are purely punitive.
phorkyas82 1y ago
It's like the blaming in a playground fight; who started first? For context: https://nitter.net/KushDesai47/status/1907618136444067901 https://nitter.net/KushDesai47/status/1907618136444067901

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ModernMech 1y ago

Because when the blowback comes, people will be looking to cast blame for starting this whole trade war, and when that time comes Trump will point to the word "reciprocal" and say "we didn't start this, we were only reciprocating".

gjsman-1000 1y ago

> Is the US just matching the tariffs set by the other countries? No. Trump claims that the new tariffs are a 50% discount on what those countries tariff US goods at. (Even if that's questionable - is VAT a tariff?) If he's correct, or anywhere close, this is a "tough love" strategy to force negotiations. We'll see how it goes. It also plays to his base - why should we tariff any less than they do us? And they have a point, it's the principle of the thing.

f33d5173 1y ago
It's so quaint to me that people actually believe his rhetoric. How long do you think people will put up with high prices before they turn on him?
- barbazoo 1y ago
  If high prices are inevitable, what’s their endgame? Are they actually incompetent or are people too pessimistic about what they’re attempting to do?
  - f33d5173 1y ago
    Prior to yesterday's announcement, the claim regarding tarrifs was that the goal was to bring manufacturing back to american soil. This is unlikely to happen in any case, but it requires at minimum that consumers put up with high prices for a while (with "a while" being measured in years, if not decades). Actually, the "liberation day" tarrifs strongly agree with this goal: after speculation, the administration announced the formula for these new tarrifs, which has nothing to do with counter tarrifs or trade barriers as claimed, and instead comes from a ratio of the trade deficit in goods and the overall amount of trade. In other words, countries that export a lot of goods to the US (and the US doesn't have commensurate goods exports to) get high tarrifs. This makes sense if the goal is to incentivize manufacturing in the US, by making manufactured goods from outside more expensive. There is another camp that thinks that trump doesn't really have a goal per se, and is rather doing all this as an exercise in showing off his strength and to draw attention to himself. This camp holds that eventually trump will get bored, or the public will turn on him, and he'll need to get rid of tarrifs to save face. We call these people "optimists".
cldellow 1y ago
> If he's correct He's not. According to [1], the White House claims Vietnam has a 90% tariff rate. According to [2], 90.4% is the ratio of Vietnam's trade deficit with the US -- they have a deficit of $123.5B on $136.6B of exports. The same math holds true for other countries, e.g. Japan's claimed 46% tariff rate is their deficit of $68.5B on $148.2B of exports. The EU's claimed 39% tariff rate is their deficit of $235.6B on $605.8B of exports. Who knows, maaaaybe it just so happens that these countries magically have tariff rates that match the ratio of their trade deficits. Or maybe, the reason Vietnam doesn't buy a lot of US stuff is because they're poor. The reason they sell the US a bunch of stuff is because their labour is cheap to Americans. (They do have tariffs, but they're nowhere near 90%: [3].) America's government is not trustworthy. Assuming that what they say is truthful is a poor use of time. [1]: https://x.com/WhiteHouse/status/1907533090559324204/photo/1 https://x.com/WhiteHouse/status/1907533090559324204/photo/1 [2]: https://ustr.gov/countries-regions/southeast-asia-pacific/vietnam https://ustr.gov/countries-regions/southeast-asia-pacific/vi... [3]: https://www.investmentmonitor.ai/news/vietnam-gives-us-tax-breaks-ahead-of-tariff-announcement/?cf-view https://www.investmentmonitor.ai/news/vietnam-gives-us-tax-b...
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rsynnott 1y ago
> If he's correct Trump is not in the business of being _correct_, or indeed caring about correctness as a concept. And no, these are, obviously, not the actual tariffs, don’t be silly.

graeme 1y ago

Someone calculated the formula used. They divided the trade deficit of each country by total trade of each country and assumed that was all a tariff. So for example Indonesia and the US traded $28 billion. The US has a 17.9 billion trade deficit with Indonesia. 17.9/28 =0.639, or 64%, which is assumed to be all caused by tariffs. So they divide by two and impose 32%. Anyway no the US isn't matching tariffs they're dramatically exceeding them.

tim333 1y ago
That's a bit of a messed up way to calculate things. I also think the US deficits are hugely overstated because much of what the US produces is intellectual capital rather than physical goods and the profits are made to appear in foreign subsidiaries for tax reasons. Like if I buy Microsoft stuff in the UK, Microsoft make out it was made in Ireland for tax purposes, but really the value is created in and owned by the US. The US company both wrote the software and owns Microsoft Ireland. So much of the perceived unfairness Trump is having a go at isn't real.
- peterbecich 1y ago
  You raise an excellent point that US corporate tax evasion is exaggerating the trade deficit. However, from the perspective of winning US elections, I think it does not change the issue that the trade deficit falls more on de-industrializing Midwestern states, and the corporations you are referring to are concentrated in Northeastern and Western states. Secondly, if Microsoft or Apple makes the profit appear in Ireland, it cannot move that money back to the domestic US, right? So as long as the money sits overseas, it would not count towards US trade and thus the deficit calculation is fair.
  - oezi 1y ago
    They don't move the profit back to the US, but through Ireland and the Netherlands they move it out of the EU mostly to some tax havens in the Caribbean. From there they use them for their stock buybacks, which I think equals mostly flowing back into the US.

tootie 1y ago

It's just spin. The new duties are purely punitive.

phorkyas82 1y ago

It's like the blaming in a playground fight; who started first? For context: https://nitter.net/KushDesai47/status/1907618136444067901 https://nitter.net/KushDesai47/status/1907618136444067901