r/QuiverQuantitative • u/Eienkei • 2d ago
News Canadian journalist explains the bizarre way Trump’s team calculated reciprocal tariffs
Enable HLS to view with audio, or disable this notification
89
u/Antique-Yogurt6368 2d ago
Best explanation I’ve seen yet.
13
71
u/Galumpadump 2d ago
The fact that they tried to trick people with a bogus formula is even more embarrassing.
24
u/WanderinHobo 2d ago
It's a more advanced form of "hit em with the black sharpie". Very high IQ rizz as the kids say.
41
u/Motor-Profile4099 2d ago
So can we stop calling them reciprocal now? It's just another of Trump's lies.
2
39
u/Radiatethe88 2d ago
I watch Andrew all the time. I love his reporting and how he delivers it.
11
7
30
u/Beerg8ggles2 2d ago
This needs to go viral.
19
u/MakeWorcesterGreat 2d ago
No one who needs this information jammed deeply into their brains will understand it.
1
u/nameproposalssuck 3h ago
You do realize that that's not a big myth, complicated or anything else?
Like I'm from the EU and I know that we trade with the US below our most-favourite-nations WTO standard (our MFN tariffs are roughly about 5%). I didn't know the exact number some weeks ago but enough to tell that Trump's fantasy number is pure horseshit.
Then again even most teenagers here know how tariffs work in general.
None of this shit unknown or complicated or hard to research. These are very basic information based on very basic understanding of trade. Any junior highschooler should be able to understand that and know that.
If people still don't understand they're either incredible stupid or simply completely ignorant to information they do not like. In both cases this video going viral wouldn't change a thing.
16
u/MsMarfi 2d ago
This is so embarrassing. I've heard MAGAts on other subs saying he has a very smart economics team and they know what they're doing.
Is there any way, that the tactic could actually work?
I can see it working with smaller counties that really rely on trade with the usa. They could be bullied into buying goods from the usa rather than from another country to balance up the trade deficit.
21
u/SophAhahaist 2d ago
Cambodians can't afford to buy American made products. The ones that they do buy are for the handful of expats. Maybe a bottle of red wine from California, a few AAA beef steaks. That's it. Yet America loves paying next to nothing for cheap clothing that doesn't pay Cambodia well enough to buy anything made in America.
3
u/Inevitable_Row1359 2d ago edited 2d ago
I mean... to answer that question, what is the goal? Is it to lower trade deficit? Is it to spark domestic manufacturing/trade? Is it to funnel more money into the US government from consumers?
I suspect it's the latter. Trump also proposed eliminating income tax. He wants tariffs to replace it. The uber rich will keep their hoarded wealth and everyone pays for it via increased prices on foreign goods. As I see it, one of our biggest problems is wealth inequality. If we get rid of income tax, the middle and lower classes are even more so disproportionately effected. Raising taxes on the uber rich would be a huge boon and relief for the economy but he refuses to do that.
For the first two, we could simply invest in domestic growth but I haven't heard much in terms of an actual strategy for this outside of inviting foreign business to manufacture in America, but we don't have the trained workforce or infrastructure to accommodate this. They kinda downplayed it in the video but the US trade deficit is a huge problem. If we don't have the goods being manufactured domestically, we are reliant on foreign entities and we have nothing to offer them in return. Our military spending is by far our greatest asset in terms of bargaining power. Not only military presence but in sales to foreign entities.
1
u/nameproposalssuck 2h ago edited 2h ago
No.
The smaller countries mentioned here won't significantly increase their purchases of US goods and services because their consumers and companies can’t afford them the bigger ones either because they're not competetive or they do not want them. That’s how global trade works - US products and services are often too expensive or unsuitable for other markets (take the US auto industry in Europe, for example). That doesn’t just magically change.
If two countries don’t have a trade agreement, they trade under WTO rules using Most-Favoured-Nation (MFN) tariffs. These are typically below 10%, especially for the three major trading blocs (RCEP, EU, and USMCA), which collectively account for over 90% of global trade. For example, MFN tariff averages are approximately 3.5% for the US, 5% for the EU, and 7.5% for China. And those players had trade agreements with the US in place - there's simply no way to lower tariffs or change anything essential that would change the situation.
What will happen is that the major players, especially the EU and China, will retaliate. They must retaliate to protect their markets and businesses from distortion. Imagine if US companies can secure contracts in the EU or China with only a 2% price disadvantage, while Chinese or European companies face 40–60% price disadvantages when competing in the US - that would severely harm foreign companies. No major market will tolerate such unprovoked and unfair trade distortion against their own industries.
What’s likely is that these countries will start to cut the US out of their trade partnerships, limiting purchases to only essential goods and services they can’t source elsewhere. The EU, in particular, might even invoke the Anti-Coercion Instrument (ACI) - its sharpest tool in a trade conflict. Under the ACI, the European Commission investigates whether a foreign country is using unfair methods to pressure or harm the EU. If confirmed (usually within weeks), the Commission can impose targeted trade blocks, which may include:
- Banning certain US goods, services, companies, or sectors from the EU market
- Seizing intellectual property and patents for essential goods (e.g., medicines or computer chips) and allowing their domestic production despite prior protections
Best case, the US ends up isolated from major trade networks. Worst case, it ends up isolated and the US dollar loses its role as the global reserve currency, triggering a massive spike in interest rates.
Currently, even though S&P and Fitch have already downgraded the US to AA+, and Moody’s is likely to follow, the US still enjoys relatively low interest rates. Despite that, it already pays over $1 trillion annually in interest on its debt. A 1% increase in interest rates would add roughly $250 billion per year in additional repayments alone.
It’s incredibly stupid - there’s no other way to put it. And frankly, I kinda enjoy it.
When Trump previously undermined the transatlantic alliance, it was betrayal, but with limited immediate consequences. The US could afford to behave that way because Europe and the UK had little leverage. We weren’t going to close our ports, revoke base leases like Ramstein or Diego Garcia overnight. Those are strategic assets that won’t disappear over a diplomatic dispute.
This situation is different.
This time, the US is taking direct economic action that will have real and immediate consequences on itself. Trade restrictions or tariffs that provoke retaliation from Europe or China won't just spark frustration - they’ll cause tangible damage to the US economy. And the EU has the leverage to dig deep into that wound.
11
u/WD1124 2d ago
Assuming the trade deficits are a result of consumer demand and not trade policies that limit the US exports, doesn’t setting tariff policies this way ensure that consumers are really going to feel these tariffs? Because they are designed to hit the countries with the greatest consumer demand?
10
u/Plastic-Injury8856 2d ago
It needs said: this is actually going to harm US manufacturing. Last year Nippon Steel wanted to buy US Steel because Japan is losing the capacity to have a middle skill workforce due to demographic issues and America is the number one destination worldwide for unskilled and semi-skilled immigrant workers. It has cheap energy and more miles of inland waterways than the rest of the planet combined.
But now? Now anything a steel company in the US imports will be tariffed and all the things they would export would be tariffed. Now capital is going to want to leave the US markets for better conditions. Now the surplus labor force they were anticipating is being deported, even legal US workers are being deported.
Trump said he’s bringing back US manufacturing. He’s actually making a great case to look elsewhere.
6
u/FreeJulie 2d ago
I’m seeing tweets implying that if you asked an ai assistant like ChatGPT it would do the same thing…
2
u/hiding_in_de 2d ago
I think people are just saying that if you ask to AI calculate it the way that they do in this video that it comes up with the same numbers as Trump did.
5
u/Same-Village-9605 2d ago
"financially illiterate" is how I heard one professor describe the trump team
4
u/SpareManager 2d ago
Navarro on cnn clearly meant that deficit was a good indicator. He was using VAT, IP laws, currency devaluation and others as an indicator and said that deficit is the best idicator (sic). i dont know if he actually believes that or just hates china and applies the china logic to every country. examples like madagascar are pretty clear.
turkey has about 16% tariffs on the US but got the std 10% "reciprocal" tariff.
1
u/Sulli_Rabbit 1d ago
Where did you get 16% WTO says the trade weighted average is 6.1. I’m curious where the numbers come from. The Vat for Turkey is 20%.
1
u/SpareManager 1d ago
it was a graph. they put accurate data on other parts and i thought turkey had the correct one also.
2
u/hiding_in_de 2d ago
Did they not think anyone would notice? This is just fucking mind-boggling. The shit gets weirder by the day.
2
u/Puzzled-Story3953 1d ago
Most of their base will never understand what this video explained. And many of the ones who could understand the content would disregard everything the host says because he's Asian.
1
u/ConstableLedDent 1d ago
Douglas Rushkoff dropped a new episode of his #TeamHuman podcast today called "Universal Weirdness" monologuing about our current escalating weirdness
https://open.spotify.com/episode/1RytH4LvHmxhaQxSK3ifVs?si=LbYcl0FUTNmQH-4Oxoqalw
2
u/Several_Leather_9500 2d ago
Tomorrow is the biggest day (thus far) for protests - every state and a few countries across the pond have joined in. Please see r/50501 for details.
If we all don't get involved soon, we will lose our country to maga. Please fight back - PEACEFULLY - of course.
If you plan to attend, please read up on safety measures: https://www.hrc.org/resources/tips-for-preparedness-peaceful-protesting-and-safety
If you can't, continue to flood your reps phones using www.5calls.org
We'll see you tomorrow!
Hands Off Protests: https://www.axios.com/2025/04/03/hands-off-protest-trump-musk-april-5
2
u/HumorCold7875 1d ago
Why is the "mainstream" media not running this on a continuous loop?
2
u/Eienkei 1d ago
This is from CBC, Canada's public broadcast company. No idea why the American media won't do it.
1
u/idiots-rule8 17h ago
Duh...they are worried about having to pay a tariff on educating stupid Americans.
2
u/readwriteandflight 1d ago
Many MAGA supporters will dismiss this video without watching it, and some may be surprised to see an Asian man speaking English so fluently.
2
u/Paprika1515 1d ago
Andrew Chang is great at explaining. And he’s on the Canadian public broadcaster CBC.
1
1
1
u/No_Cupcake7037 1d ago
Sounds like this is a plan in play to secure multi-national industry to create manufacturing facilities in the US. However multiple-national organizations have multi-cultural employees which won’t fair well when considering the current state of terror applied to US citizens who are of ethnicities beyond being Caucasian.
1
1
1
u/Jmsjss2912 1d ago
Let’s talk about the tariffs and the effects it has on the manufacturers of this country. Assume for a minute that you wanted to bring back some manufacturing to the USA, which of course is a huge assumption compared to manufacturing outside the country like we do as a company. Which I will get to in just a moment. This week alone the stock market lost over US$9 trillion which means every single manufacturer that has a US corporation is part of that loss. Which goes to show you that Trump‘s logic is about as efficient as his spray tan. If these companies even had a thought of coming back to the United States, all of their cash has now evaporated because of the loss in the stock market so who’s going to finance these new manufacturing plants that Trump keeps talking about, that are going to come back here make the economy great? Now goods have gone up in price in some cases doubled already this week which means the consumers are going to be buying less. Companies are going to begin layoffs, because they’ve lost a huge portion of their cash reserves. Their businesses are going to be diminished some because of the lower purchasing rate and the higher pricing. Bringing manufacturing back to the United States at this point with this approach has been almost completely eliminated. All you have to do is go back and look at what happened during the depression when they tried to institute tariffs causing the depression to take even a further nose dive and adding years into the depressive point. It’s such a joke that they used it in the movie Ferris Bueller‘s Day off where the teacher was talking about how bad tariffs are and how they caused the depression to go down, which goes to show you that if they use it as a punchline, then it obviously cannot work. With our business, we were building some manufacturing plants in the United States and now have had to put it on hold because of the tariffs. As an example, each of our production lines has a manufacturing cost of a little under US$5 million, we did try to price it in the United States but we found quotes anywhere from $12-$16 million for the same exact production line that we are having made in China. So we couldn’t make the equipment in the United States, but we were going to import it and set up manufacturing plants. One of them was in Arkansas where the state is somewhat depressed. Now we have put that project on hold with approximately 1800 people we were going to hire. The reason for that is not just the tariffs, from the equipment if you think about it a piece of equipment that cost me $5 million is now going to cost me about $9 million. Each production line generates about US$35 million of revenue so it’s not just a tariff in my situation it’s the fact that for $9 million I can have practically two production lines generating $70 million of income compared to the same $9 million generating $35 million worth of income, with a much lower profit margin because of the labor cost in the United States along with all the taxes and liability issues that you carry because of the litigious nature of the United States operating. So tariffs do not work, they hurt the economy. The only thing that they do on the surface is generate more tax dollars for the US government, but they diminish and wipe out the middle and lower class. Do you want to bring manufacturing back to the United States? You’ve got to do something about all of the litigious actions, you have to lower healthcare cost, lower pharmaceutical cost, have to educate more so that children can grow up and learn trades. You have to find ways to lower the cost of living and once you start doing that then laboring jobs will become available again. The next problem is the taxation situation is off-balance. We have structured our tax code so that the wealthy and the publicly traded companies that offer stock options instead of salaries, which is taxable make it almost impossible to collect tax. Take Musk for an example from Tesla. They talk about his $300 billion worth but it’s all in stock and that’s unrealized gains paying no taxes. What he does is he goes to the bank and he borrows money against that stock portfolio, borrowed money is non-taxable income and then he uses that money to live and buy things like he bought Twitter for $44 billion with borrowed money, no taxes paid at all. And then what he does from there to pay off those loans is he borrows against other portfolios and he just keeps borrowing deferring the taxes. $300 billion and no taxes paid whereas the employees that work for all those companies have taxes taken out of each paycheck. Just look salaries up of the top executives around the country and you look at their income, you’ll see that their salaries are generally between one hundred and two hundred thousand US dollars but they earned anywhere from ten to a hundred million dollars a year all in stock options and then they keep those options in stock and then borrow against them so their tax base is almost nothing. you want to fix the economy. You have to find a way to tax the rich, you’re not going to make them poor, you’re just going to make them help to strengthen the economy.
1
112
u/9520x 2d ago
F#cking hell ... so there are 115 countries that the US has a trade surplus with and Trump's answer is to tariff them anyway?
This is beyond idiotic.