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> Trump tariffs as of today stand around 90B/year Of course total revenue will decrease. Possibly very significantly so only a fraction of that estimated will

by qwytw 2y ago

> Trump tariffs as of today stand around 90B/year Of course total revenue will decrease. Possibly very significantly so only a fraction of that estimated will be collected. > a weighted mean of 2.8%. Can you explain where are you getting that? I'm not saying it's false but ~45% of all use imports come from China, Canada and Mexico. If they are all taxes at 10%/25% the mean would be significantly above 2.8%?

owenversteeg 2y ago
Are you aware that the US did this before (weighted mean tariffs >doubled in Trump’s first term) and it worked well enough that the Biden administration kept the tariffs and even increased some? You may want to take a look at a graph of US imports by year or tariff revenue by year to see your “very significant” decrease in revenue (hint: it kept going up…) I don’t claim that it is entirely independent of tariff rates forever, but it is certainly nowhere near as dependent as people imagine. >Can you explain where are you getting that? Sure, there are various organizations that study US tax policy and they generally publish estimates of revenue generated by a proposed tariff. I took a look at a few and found estimates around 90-100B first year. The reason that it’s not simple to calculate these tariffs is because tariff law is complex and real world behavior shifts. With the last Trump tariffs there was a huge shift out of China for several industries. Companies also lie about the value of things: https://www.federalreserve.gov/econres/notes/feds-notes/did-the-us-bilateral-goods-deficit-with-china-increase-or-decrease-during-the-us-china-trade-conflict-20210621.html https://www.federalreserve.gov/econres/notes/feds-notes/did-...
- qwytw 2y ago
  > Are you aware that the US did this before No because it wasn't even remotely the same. In 2022 the average tariff on Chinese imports was 2.86%, 0.01% on Mexican goods and 0.12% on Canadian goods. Besides that the first term tariffs were targeted and not applied universally to all imports. That "great/fantastic deal"(USMCA) that Trump "negotiated" back in his first term kept most trade with Mexico and Canada more or less tariff free. TBH it's hard to tell if you're being purposefully obtuse or not... > The reason that it’s not simple to calculate Yes and while I very well might be wrong I just don't see how is the 2.8% figure arithmetically possible. e.g. https://www.fitchratings.com/research/structured-finance/effects-of-us-tariff-policy-changes-will-vary-sharply-across-sectors-countries-09-01-2025 https://www.fitchratings.com/research/structured-finance/eff... had different calculations (of course it assumes 60% on China and 10% on all other countries besides Mexico/Canada so it would be well below 21% but not 2.8% either).
  - owenversteeg 2y ago
    >it wasn't even remotely the same I think everyone can agree that in both 2018 and 2025: 1) Donald Trump announced sweeping tariffs on major trade partners - among which China, Mexico and Canada; 2) most media predicted a large-scale disaster; 3) large parts of the tariffs were later cancelled entirely, delayed, or scaled back. I'm not sure what part of that "isn't even remotely the same." You highlight the low average tariff rates by country despite the (large) first Trump tariffs. This is _exactly_ my point: when you account for all exemptions, changes, agreements, rerouting of trade etc, the marquee double-digit numbers shrink dramatically. --- As for the exact number, obviously it is impossible to know, and there are many ways to measure it. It's not uncommon for two estimates of tariff revenue, both calculated in honest ways, to be widely at odds. This is one reason why I qualified my numbers as "very rough", but I did lay out my reasoning above. To make it simple: most groups (CRFB, Tax Foundation, etc) estimated the tariffs we were discussing (China +10, Canada/Mexico +25) to sit - very roughly - at 100B of revenue raised plus or minus a few tens of billions. Current US tariff revenue is approximately 100B. So, in other words, we're talking about an approximate doubling of mean tariffs, which stand at around 1.5-2% today depending on who you ask and how it is measured.

by qwytw 2y ago

owenversteeg 2y ago

Are you aware that the US did this before (weighted mean tariffs >doubled in Trump’s first term) and it worked well enough that the Biden administration kept the tariffs and even increased some? You may want to take a look at a graph of US imports by year or tariff revenue by year to see your “very significant” decrease in revenue (hint: it kept going up…) I don’t claim that it is entirely independent of tariff rates forever, but it is certainly nowhere near as dependent as people imagine. >Can you explain where are you getting that? Sure, there are various organizations that study US tax policy and they generally publish estimates of revenue generated by a proposed tariff. I took a look at a few and found estimates around 90-100B first year. The reason that it’s not simple to calculate these tariffs is because tariff law is complex and real world behavior shifts. With the last Trump tariffs there was a huge shift out of China for several industries. Companies also lie about the value of things: https://www.federalreserve.gov/econres/notes/feds-notes/did-the-us-bilateral-goods-deficit-with-china-increase-or-decrease-during-the-us-china-trade-conflict-20210621.html https://www.federalreserve.gov/econres/notes/feds-notes/did-...

qwytw 2y ago
> Are you aware that the US did this before No because it wasn't even remotely the same. In 2022 the average tariff on Chinese imports was 2.86%, 0.01% on Mexican goods and 0.12% on Canadian goods. Besides that the first term tariffs were targeted and not applied universally to all imports. That "great/fantastic deal"(USMCA) that Trump "negotiated" back in his first term kept most trade with Mexico and Canada more or less tariff free. TBH it's hard to tell if you're being purposefully obtuse or not... > The reason that it’s not simple to calculate Yes and while I very well might be wrong I just don't see how is the 2.8% figure arithmetically possible. e.g. https://www.fitchratings.com/research/structured-finance/effects-of-us-tariff-policy-changes-will-vary-sharply-across-sectors-countries-09-01-2025 https://www.fitchratings.com/research/structured-finance/eff... had different calculations (of course it assumes 60% on China and 10% on all other countries besides Mexico/Canada so it would be well below 21% but not 2.8% either).
- owenversteeg 2y ago
  >it wasn't even remotely the same I think everyone can agree that in both 2018 and 2025: 1) Donald Trump announced sweeping tariffs on major trade partners - among which China, Mexico and Canada; 2) most media predicted a large-scale disaster; 3) large parts of the tariffs were later cancelled entirely, delayed, or scaled back. I'm not sure what part of that "isn't even remotely the same." You highlight the low average tariff rates by country despite the (large) first Trump tariffs. This is _exactly_ my point: when you account for all exemptions, changes, agreements, rerouting of trade etc, the marquee double-digit numbers shrink dramatically. --- As for the exact number, obviously it is impossible to know, and there are many ways to measure it. It's not uncommon for two estimates of tariff revenue, both calculated in honest ways, to be widely at odds. This is one reason why I qualified my numbers as "very rough", but I did lay out my reasoning above. To make it simple: most groups (CRFB, Tax Foundation, etc) estimated the tariffs we were discussing (China +10, Canada/Mexico +25) to sit - very roughly - at 100B of revenue raised plus or minus a few tens of billions. Current US tariff revenue is approximately 100B. So, in other words, we're talking about an approximate doubling of mean tariffs, which stand at around 1.5-2% today depending on who you ask and how it is measured.