[CountSessine]

I don't know about incompetent - there's plenty of smart people around Trump. The big problem seems to be that they all kind of disagree with each other and Trump ends up doing what the guy who talks to him most recently advises him to do.

The current "plan" seems to be to leave behind the largely-defunct WTO once and for all and build a selective free-trade alliance specifically excluding China, much like GATT was. I don't think this would really make the US "richer" (or any participant in the alliance) - in fact it would probably make us all a bit poorer. But it would make China much poorer which at this point is kind of the goal.

https://www.hudsonbaycapital.com/documents/FG/hudsonbay/rese...

But that's just today. Next week someone else might get Trump's ear before he speaks to the press.

[zmmmmm]

Which "smart" person advised him to calculate tariffs based on trade imbalance for each country, including uninhabited islands? It's an utterly stupid idea that makes no sense at all.

[CountSessine]

If you read Miran's paper, the point of the tariffs is to bring US trade partners to the table to negotiate the alliance, so really they could be anything at all. It could have been 420% or 31.4159% or whatever, right across the board.

But the amounts are actually kind of clever and it reflects the fact that there's a more mature understand of trade barriers now vs when the WTO was negotiated.

How much do you know about trade barriers? Beyond tariffs, they're extraordinarily complicated and rely on regulations, trip-wires, and unequal application of rules.

Canada has "free trade" with dairy, but only on dairy imports up to a point, and after that heavy tariffs apply. But no one ever imports enough to incur those tariffs, so, that's free-trade, right? But actually, no one considers the Canadian dairy market worth the trouble without being able to import large amounts of dairy. So Canada can legitimately say that the trip-wire isn't applied, but it's a long ways from "free trade" because large importers are kept out.

China requires that foreign companies must partner with local companies to sell into the Chinese market. This effectively leads to a lot of technology transfers. It's not a tariff, but it's pretty clearly a "trade barrier" because companies that want to protect their IP are denied access.

In the 80's when US trade reps were negotiating with Japanese trade reps, the Americans would try to convince the Japanese that free trade was best for Japanese consumers. The Japanese reps would just respond, "how much do you want us to buy?"

The Japanese really didn't believe in free trade, and they were actively manipulating the value of the Yen at that point (it would be a few years still before the Plaza Accord), so they knew that just lowering tariffs wasn't going to make US goods sufficiently more competitive in Japan.

What's changed in 35 years is that the US doesn't really believe in "free trade" anymore either - not after all of the grief the WTO brought. The simple formulas are a no-bullshit approach to trade - the same ones that motivated those Japanese trade reps.

"I don't care how your trade barriers work - currency manipulation, tariffs, excess regulation, unequal rules - just fix your sh*t to reduce the trade imbalance."

[CountSessine]

For the record, I'm not really sure how I feel about this plan. Free trade with China uplifted 700 million people (in China) from poverty.

OTOH, if you believe that China is basically Germany circa 1938 (and indeed, China in 2025 is the largest and most successful fascist state in all of history), then kneecapping China's economy makes plenty of strategic sense.

But we could always just keep buying Hitler's Volkswagens - that's the direction our incentive gradient points in. The US doesn't need to be the global police - we could always just let China have Taiwan, the Senkakus, the Ryukyus, etc...

[LPisGood]

I think what a lot of people miss when they talk about America being the “global police” is that almost always the law (so to speak) that the “global police” are enforcing is enforcing is the advancement of American interests.