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The Impact of 25% Tariffs on Canadian GDP
- voisin 2y ago> According to Deepseek, the tariffs could shave as “little” as 1.7% or as much as 8% off of Canada’s GDP, with the baseline estimate around 4%. That’s roughly in line with the Bank of Canada’s projection. The BoC estimates 6%. I guess it is accurate to say the 1.7% - 8% estimated by Deepseek is “roughly in line”, but it is such a large range as to be pretty useless. Though, if you look at the BoC’s ToTEM model for GDP, it is pretty useless as well, relying on shaky assumptions like a regression to the mean over 6 quarters, which isn’t accurate when it matters most.
- ahmeneeroe-v2 2y agoAnything more precise is likely wrong. A 25% tariff from your largest trading partner (and world superpower) is an extremely impactful event.
- margorczynski 2y agoAside from the tariff effect itself it could cause a panic and market run ending up in a recession.
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- Spooky23 2y agoThe interesting thing to analyze is the impact of the deal. The retaliatory tariffs from Canada would be really painful and impactful to the US. The auto industry would implode. The dopey magas in the Midwest would be all laid off in weeks. Unless we’re going full fascist and rolling tanks, this is positioning for some sort of deal. They cowed Columbia with this stuff, there’s a limited time to play the playbook.
- abirch 2y agoGDP numbers with decimal points need to be taken with a grain of salt. The US economy will be hurt as well. Housing costs without Canadian lumber are going to skyrocket, especially with the different natural disasters and home building.
- XorNot 2y agoThe "is that a big number?" issue basically. At the scale of a national economy it's just about impossible to comprehend what a small digit % even means (I have some luck reimagining everything as 1 in X, which tends to feel more relatable at least for human centric topics).
- JumpCrisscross 2y ago> shaky assumptions like a regression to the mean over 6 quarters, which isn’t accurate when it matters most For most second- or third-order effects, this isn’t a bad assumption. When you’re putting a 25% tariff on your largest trading partner into an economic model, you’re already in EVT territory—the central tendency is less relevant than the ranges.
- 3x3m3 2y agoNothing made me feel as dumb as reading its chain of thought. It made it click for me how hopeless we will be soon, once we cannot comprehend even the reasoning for some things.
- ceejayoz 2y agoLet an expert in the field examine its reasoning first. LLMs are great at putting out reasonable sounding bullshit. Just because it came up with a roughly equal result doesn’t mean its explanation is sound.
- jvanderbot 2y agoThis is not a wrong sentiment. I'd be super interested in hearing an analysis of its CoT. To my ears it was a nearly schizophrenic roundabout with a lot of contextual things like "that's high" but I don't know why it thinks that.
- sdwr 2y agoWhat I think is incredible about this example is how adept it is at mixing precise calculations with rough heuristics. That's exactly what I was taught, to validate the numbers by asking "Does this answer seem reasonable?" ChatGPT doesn't do that at all, as far as I'm aware
- IAmGraydon 2y agoI'm not so sure. LLMs are more like human simulators and are pulling this "reasoning" from what they've seen in the training data. It therefore might be possible that they cannot be more intelligent than those who wrote the source material.
- talldayo 2y ago“Once men turned their thinking over to machines in the hope that this would set them free. But that only permitted other men with machines to enslave them.” - Frank Herbert, Dune
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- BSOhealth 2y agoWould be interesting to get an AI take on the other side, what is the most likely range that the US stands to gain from this action? After that, why don’t we just have these two AIs game theory it out with each other? They seem to have a more objective and holistic incentive structure than former TV celebrities and career politicians.
- TylerE 2y agoWe will lose, not gain. Tariffs will be paid for by consumers, every dime, make no mistake.
- georgeecollins 2y agoI agree its a terrible idea, but an economics text book will tell you that a tax on a transaction will be split between buyers and sellers based on the elasticity of demand. So its not quite that simple. But imo not a good idea either.
- thordenmark 2y agoDomestic competition will mitigate those costs.
- freshnode 2y agoWhy on earth did I just read a blog post where it said - "hey, here's what some AI thought about the whole thing?" No human analysis whatsoever. SMH. We're in a precarious spot here folks!
- insin 2y agoI closed the tab and flagged the item after the third paragraph, I mean, FFS, it's the sort of stuff that gets downvoted into invisibility when people do it in HN comments
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- amatecha 2y agoWhenever people talk about tariffs on Canadian goods I just remind them of the last time that happened. We slapped 'em back with similar tariffs and suddenly the US tariffs were lifted. https://www.canada.ca/en/department-finance/programs/international-trade-finance-policy/measures-steel-aluminum-businesses/countermeasures-response-unjustified-tariffs-canadian-steel-aluminum-products.html https://www.canada.ca/en/department-finance/programs/interna... Not sure why buddy even talks about this because we have no problem doing the same thing.
- lambdasquirrel 2y agoI apologize about our president as I’m sure many U.S. citizens would. That is all.
- readthenotes1 2y agoThough perhaps fewer than wouldn't https://www.nbcnews.com/politics/2024-elections/president-results https://www.nbcnews.com/politics/2024-elections/president-re...
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- philistine 2y agoHe's your president. Don't apologize for him. Do better.
- stonesthrowaway 2y ago> Whenever people talk about tariffs on Canadian goods I just remind them of the last time that happened. You forget to mention that canada initially refused to renegotiate NAFTA as Trump demanded. But Canada ultimately did renegotiate NAFTA... Also, canada is a tiny economy relative to the US. A genuine tariff war between the US and Canada wouldn't end so well for canada.
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- skeeter2020 2y agoAll this says is that a LLM model can roughly reproduce the model & results that a human did; they can both produce logical sounding bullshit about a incredibly rare event for which they don't really know the answer. Logical reasoning for the actions of an unpredictable idiot would be laughable if it was not so serious.
- jorgelr 2y agoSame question but for Mexico: "The model predicts a 15.5% GDP contraction under simplified assumptions. Real-world impacts would likely be milder due to exchange rate adjustments, policy responses, and import reductions. This highlights the sensitivity of trade-dependent economies to tariffs and the importance of holistic economic modeling." And what about the impact on employment?: "A 15.5% GDP contraction could lead to 8–12 million job losses in Mexico, disproportionately hitting export manufacturing and informal workers. Unemployment rates could surge to 25–30% (including underemployment), with long-term scarring effects on labor productivity and social stability. However, aggressive fiscal/monetary policy, peso depreciation (boosting export competitiveness), and diversification to non-U.S. markets (e.g., EU, Asia) could soften the blow."
- Analemma_ 2y agoThis should be not just flagged but the entire blog blacklisted from HN. For fuck's sake, there's literally no value in a post that's nothing but "here's what some AI said about it."