Today's tariff news
2025-04-03 23:36:03.238695+02 by Dan Lyke 0 comments
Economist James Surowiecki quickly reverse-engineered a possible explanation for the tariff pricing. He found you could recreate each of the White House’s numbers by simply taking a given country’s trade deficit with the US and dividing it by their total exports to the US. Halve that number, and you get a ready-to-use “discounted reciprocal tariff.” The White House objected to this claim and published the formula it says that it used, but as Politico points out, the formula looks like a dressed-up version of Surowiecki’s method.
The price level from all 2025 tariffs rises by 2.3% in the short-run, the equivalent of an average per household consumer loss of $3,800 in 2024$. Annual losses for households at the bottom of the income distribution are $1,700.
As others have pointed out, in the face of an 11½% effective percentage point increase, it's perhaps worth looking back to previous tariff disasters
The Smoot-Hawley Tariff remains a cautionary example of protectionist economic policy, frequently cited in debates over the risks and consequences of trade restrictions in modern economic discourse.[3] Excluding duty-free imports, the tariffs under the act were the third highest in U.S. history, after the tariffs imposed on the world by Trump in 2025 and Tariff of 1828.[4]