• wuzzlewoggle@feddit.org
    2·
    1 day ago

    I know Trump is dumb. I know his administration is dumb. I still can’t fathom that someone is this stupid. Does he really think all goods that are currently being imported will magically start being produced in the US, just because he puts import tax on them? I just can’t wrap my head around someone being so incredibly naive so he either must be

    1. Actively trying to destroy the american economy, probably because Putin wants him to
    2. There is some other plan that we just don’t see yet Or 3. He really is that stupid.
    • Initiateofthevoid@lemmy.dbzer0.comEnglish
      1·
      10 hours ago

      I know Trump is dumb. I know his administration is dumb. I still can’t fathom that someone is this stupid.

      Oh but it can get more stupid, don’t you worry. The following is a quote from Trump’s Trade Representative, where they describe how the tariffs were calculated:

      The recent experience with U.S. tariffs on China has demonstrated that tariff passthrough to retail prices was low (Cavallo et al, 2021).*

      What is this recent experience that the Trump administration learned from, you ask? Cavallo et al studied the impact of Trump’s tariff on China in 2018! What else did they find?

      US profit margins decreased on both imports AND exports as a result of the tariffs, while China’s was much less affected. The paper clearly shows American tariffs hurt Americans more than literally anyone else, and the Trump Administration “read” that paper and publically cited it as a source on a government website.

      Our analyses indicate that the price incidence of US import tariffs falls largely on the United States… Our results suggest that retailers are absorbing a significant share of the increase in the cost of affected imports by earning lower profit margins on those goods… [These analyses reveal] that the recent tariffs applied by foreign governments on US exports have affected total foreign import prices far less than was the case for the recent US tariffs

      *Please note while prices remained stable in response to that one tariff, Cavallo did not suggest it was a generalizable fact. It’s not.

      TL;DR:

      • Research shows Trump’s 2018 tariff hurt US importers’ profit margins more than anyone else. They paid the cost (that time) to keep prices stable.
      • It also shows China’s reciprocal tariffs hurt US exporters much more than it hurt China’s importers.
      • The Trump administration legitimized this research when they cited it in their flawed reasoning that domestic prices always remain stable after tariffs (they don’t)