Tariff co-incidence
The tariffs announced by President Trump are based on what he describes as tariffs imposed by other countries on the US. These don’t bear any obvious relationship to the numbers that ordinary economists would describe as tariffs
However, a poster on Twitter, @nonagonono, found there is a strong relationship between the claimed tariff and the countries import/export balance with the US
We want to be a little sceptical of relationships that come just from data-dredging, with no real theory, but this relationship is tight enough that it probably isn’t just a coincidence, and probably does tell us something about the definition of ‘tariff’ the President is using. If so, the ‘tariff’ of 20% that New Zealand allegedly imposes is actually a trade deficit of 20%, which is not quite what I get from NZ trade figures (24%) but is close enough that some slight changes in definition might explain it.
Thomas Lumley (@tslumley) is Professor of Biostatistics at the University of Auckland. His research interests include semiparametric models, survey sampling, statistical computing, foundations of statistics, and whatever methodological problems his medical collaborators come up with. He also blogs at Biased and Inefficient See all posts by Thomas Lumley »
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Apparently the trade only counts “Goods” and not “Services”. If Trump counted services then it would look very different. Anyway, it appears he’s tariffing uninhabited islands.
1 day ago
https://ustr.gov/issue-areas/reciprocal-tariff-calculations
Have to add in halving for being “kind” and there you have it.
1 day ago