Trump treachery
The Trump tariff calculation equation given by the Office of the United States Trade Representative (USTR) document that was used to calculate the first column of his precious table labelled “Tariffs Charged to the U.S.A. including Currency Manipulation and Trade Barriers” wasn’t in fact that at all but was:
Δ𝛕i = (xi - mi) / εφmi
Where:
Δ𝛕i is change in tariff for country i
xi is exports from the US to country i
mi is imports to the US from country i
ε is elasticity of demand (assumed to be -4)
φ is pass through of tariff (assumed to be 0.25)
The “logic” behind this is to attempt to factor in the effect of tariffs on prices (φ) and the effect of price on demand (ε) to determine how much tariffs need to change in order to balance any deficit or surplus.
Because ε is -4 and φ is 0.25, εφ is -1 so this reduces to:
Δ𝛕i = (mi - xi) / mi
For Australia in 2024 (also from the USTR):
xi was USD 34.6 billion
mi was USD 16.7 billion
So:
Δ𝛕i = (16.7 - 34.6) / 16.7
= -1.072
So the US has a 107.2% surplus with Australia rather than the 10% deficit claimed by Trump’s precious table which should have shown -107, not 10.
So if, after this deliberate, underhanded lie by Trump, Australia still wanted to be generous and provide a 50% discount, they should only increase tariffs on imports from the US by 50.36% bringing the figure up from the current 0% to 50.36%. But of course Anthony Albanese isn’t as stupid as Trump, luckily.
The sooner the legality of this childish tantrump is challenged in court the better.
Thank you for your attention to this matter.
What a smug prick
Go Albo!
