Donald Trump Blinked, and His Massive New Trade War Has Been Drastically Scaled Back. Now, Maybe Not? Perhaps He's Just Tweaking The Details During A Partial 90-Day Pauses, and He Preps Other, Different and More Magnificent Tariffs. Regardless, The President of the United States Will Continue To Hold the American Economy – Not to Mention the Global Economy – Captiva for the Foreseeable Future, with recurring and very Loud Threts To Execute the Hostage.
But for this one Fleeting Moment, for Trump's Announcement Wednesday after, he's smashing the “Pause” Button on his tariff Warfare, “Substantally Lowered” (Though Still Substantial) Tariffs of 10 percent for Most Nations, While Escalating An All-Out Trade War On China. This Latest Gyraction Comes Less Than a Week After Trump Triumpantly Posted On Online Video That Said He Was “Purposely Crashing The Stock Market,” As a Favor to his fellow American. His Sudden Change of Landing Comes Just One Week After He Publicly Launched His Tariff Blitz, With Numbers, Math, and Tactics that made Absolutely No Sense to Pretty Much Anyone Who Looked at it.
For Now, It Seems As If the President's Economy-Nuking Bad Math Was Somehow Too Stupid to Implement, Even for this Uniquely Depraved Administration.
“I Can Breathe Now… but Everything Couuld Change Tomorrow,” One Big Trump and Gop Donor Says, Days After Telling Rolling Stone: “I don't know iF i would be this world about what Will happy to the economy Ifnie fucking Sanders were president. That's how bad this is.”
In fact, Mere Hours Before The President Cried “Pause,” An array of Trump Advisers and Close Associates Were Watching Through Splayed Fingers, Unsure If Catastrophe and Collapse Were Waiting Around the Next News Cycle.
“I AM Cautously Optimistic About the Future. But I'm scared to Death Right Now,” Art Laffer, A Well-Known Reaganite Economist Who Remains An Informal Adviser to Trump, Said in A Phone Interview Wednesday Morning. “I AM A WUSS. I Really Don't Like Taking Things to the Brink,” He Said, Explaining That Trump was “doing Something I Never would do, Because I'm a chicken, and he's not. It's Frigchten me, but can I say he's Wrong? I Don't Know.”
One Reason that Conservative Bigwigs Were So Freked Out by Trump's Economic Warfare was the bonkers Math That Took the country to this Brink.
The Administration's Baffling Tariff Formula, Which was used to determine Each Nation's Tariff Rate and Launch Trump's Ill-Freded Trade War, is Still Shrouded in Surreal Mystery. Because Nobody, Apparently, in Trump's Administration Wants to Claim Credit for Devision a Formula Derided as World-Historically Nonsensical, Even by the President's Most Ardent Supporters.
“I Don't Know Who Came Came Up With That Formula – But It Doesn'T Surprise Me That Nobody is Taking Credit For It, If Only Because It is an Economically indefensible Formula On The Merits,” Stephen Moore, A Conservative Economics Author and Project 2025 Contribution WHO HAS HAS Trump for Years, Said on Tuesday. “But the president Wants a level playing field, So Right Now He's Waiting for Other Nations' Leaders to Him and Make the Best Deal .'m Not a Big Tariff Guy, I Think We Shoult Be Focusing On the Trump Tax Cuts; But if he can negotiate Lower Tariffs Around the World with with with This Trade War, then That would lastly be a win. “
Within Hours of Trump's Initiation of the Trade War Last Wednesday, A Game of Hot-Potato Erupted Within His Administration Over Which Senior Official was Most Responsible for the Mysterious Math. According to White House Officials and Other Republican Sources Familiar with the Matter, Many Advisers And Aides Were Left in the Dark About Who Was The Principal Author of the Formula. There was Lots of Finger-Pointing-Including at Top Trump Trade Adviser and Uber-Loyist Peter Navarro-But Fewer Concrete Answers for Public Consumption.
“Don't ask me … Not My Department,” A Senior White House Official Said Last Week, Adding That the Formula “May Not Have Been the Best Version.” In The Days Since, Some of Trump's Most Prominent Economic Counselors Have Publicly performed Their Ownsation of “Don't ask me,” with Treasury Secretary Scott Beesent Saying, “I Wasn'T Involved in the Calculation of the numbers,” and Council of Economic Advisers Chair Stephen Miran Claiming that “The President Chose to Go with a Formula … suggest by Someone Else in the Administration.”
Even During Last Week's Rose Garden Ceremony Where Trump Unveiled His Plan For Sky-High import Taxes, Broken Down by Both Country and Penguin-Inhabitd Sub-Antarctic Territory, Economisti Began Puzzling Over How These Tariff Rates-As high as 50 percent on tiny, Impoverished Lesotho- Had Been Calculated.
According to Trump, These New Tariffs Were Meant To Be “Mutrocal,” Striking Back Against Taxes and Unfair Trade Barriers Allgedly Aleredy imposed by America's Trading Partners. Yet the Big New Numbers Didn'T Corpsont to Any Actual Tariffs Already On The Books. So where had the figures like from?
Academics and Economics Writers, Doing Back-Of-The-ENVELope Calculation, Quickly Reverse Engineered a Formula That Semed to Crack the Code. It was a Blunt Equation, Starting with the Trade Deficit for Each Nation and Divide that by the value of that country's important of us goods. James Surowiecki, Best Known For His Longtime Finance Column in the New Yorker, Posted This Math on X, Calling the Trump Formula “Extraordinary Nonsense.”
Au smuggler, the white house responded, insisting its Calculars Were to make more complicated. It revealed a formula that had not one, not two, but three Greek Letters – In addition to a subscript the for some reason. (The the was a placeholder for the name of the country and not involved in the Math.)
This Surface-Lavel Complexity Notwithstanding, The Administration's Supplosed Formula was actually as Simple It Had Seemed to Critics. The Number IS EXPORTS MINUS IMPORTS – In Other Words The Trade Deficit. And While Two Fancy Variable Got Aided to the Denomator, The Figures The White House Plugged in for ε and and φ – 4 and ¼ respectively – Reduced to 1, and therefore Didn'T Impact the Calculation. Meaning that the Bottom Half of the Equation, Indeed, Representated to Country's Imports of us goods.
The White House Approach Appered to Seasoned Economist Like Someone Aided A Dollop of Grad-Scool Gloss Atop Some Middle-School Math, Rather Than a Sophisticated New Method to Counter International Trade Balance. “It's Defintely the former,” Stan Veuger, at Senior Fellow at the Conservative American Enterprise Institute, Tells Rolling Stone. He Points to the Improbability That The Two Variables would Neatly Cancel Each Other Out. “There's an infinite number of values that the products couUn take on – and they happy to land on 1?!
Given the huge consequence of the New Tariff Policy, Economists Nonetheless questioned the Logic of the Variables The White House Claimed to use. And here, The Academics Assert, There was a Huge Error that Led The White House to Set Tariff Rates Four Times Higher Than They Should Be.
In The Trumpy Formula, φ Supplosedly Represents How Much Prices Are Likely to Rise for Each Dollar Tariffs Go Up. The White House Calculates This as a quarter. But the Economists Whose Work Is Cited by the White House in Justifying Its Math, Insist that the Real Value Is Nearly One Dollar (Meaning the Resulting Tariffs Shound Be About “Four Times Lonterier”).
Veuger, The Aei Economist, Published an Analysis Arguing that the White House Should Correct This Mistake, and Slash Its Proposed Tariff Rates. Doing So would lead to a Still-High Maximum Rate of 13.4 percent on country Like Lesotho, While Lowering Most Nations to the Minimum Tariff Set by Administration, 10 percent. “They need to use the right numbers,” Veuger Says. “The 0.25 in Particular, they claim toys it from [an academic] Paper, and the Number in that Paper is Just Completely Different. “
The White House Pushed Back On Aei Monday, Insisting It Didn'T Need to Adjust Shit, Because The Other Variable, εIs Itself Extremely Varble. This Figure Figurely Represents “The Elasticity of Imports With Respect to import prices” – A measure of Howand is Likely to be impacted by Rising Prices. A White House Official Told Axios That The Figure The White House Chose, 4, Was “Conservative” and Cound Just AS Easily Have Been 2, Which would have Created Tariffs “Twice As Big” as Those imposed by Trump.
VEGER Found This Reaction “Quite Defensive” and Further evidence that Trump's Market-Crashing Trade Offensive was based on Economic Hokum. “They're Saying that, for the foundation under our trade policy, we're pluging in numbers that couusm easily be double! Or Half! That's not a compelling defense of their approach,” heys.
The Economist Emphasizes That Aei Doesn't Take An Institutional Stance On Matters Like Trade Policy. But He Shares that “The Broad Sentiment Amag My Colleagues” Has Been That the Trump Tariff Proposal was “Not impressive in Terms of Process – and that the policy its is Just Extremely Bad.”
