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Its not an arithmetic error, its a conceptual error. A pretty serious one if true. That said it makes no sense any way, and IMO high tariffs are a bargaining c
by graemep 2y ago
Its not an arithmetic error, its a conceptual error. A pretty serious one if true.
That said it makes no sense any way, and IMO high tariffs are a bargaining counter and the real reason for the formula is that it reflects how much pressure the us can put on a country by raising tariffs relative to the damage that could be done by retaliatory tarrifs.
- alephnerd 2y agoMy hunch is some staffer probably flagged this issue early (the Carvallo and Gopinath paper had significant traction in the Biden admin and the EU when crafting policies against China Shock - especially in EVs and Pharma), but if they followed the correct model, they could not force a decoupling from China, as it would place China in the same bracket as much of the rest of the world. The story about "bringing manufacturing back to the US" is just a fiction, and this tariff is a de facto blockade against China by placing a total tariff rate of 65% against China compared to other Asian countries (20-30% range for Taiwan, India, Japan, and SK) [0]. It's basically another Project 2025 foreign policy initiative. [0] - https://www.bloomberg.com/news/articles/2025-04-03/us-tariffs-seen-as-far-worse-shock-to-china-than-first-trade-war https://www.bloomberg.com/news/articles/2025-04-03/us-tariff...
- graemep 2y agoNo doubt China is the main target - it is a security threat as well as an economic one.