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Joined: Jun 2019
Posts: 7,297 Likes: 175
Top 30 Poster
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Top 30 Poster
Joined: Jun 2019
Posts: 7,297 Likes: 175 |
Lol, I just took a look at this "Tariff Adjustment Calculator"... ("Consider an environment in which the U.S. levies a tariff of rate τ_i on country i and ∆τ_i reflects the change in the tariff rate. Let ε<0 represent the elasticity of imports with respect to import prices, let φ>0 represent the passthrough from tariffs to import prices, let m_i>0 represent total imports from country i, and let x_i>0 represent total exports. Then the decrease in imports due to a change in tariffs equals ∆τ_i*ε*φ*m_i<0. Assuming that offsetting exchange rate and general equilibrium effects are small enough to be ignored, the reciprocal tariff that results in a bilateral trade balance of zero satisfies:") This doesn't define "elasticity" or "passthrough". And "assumptions about exchange rate equilibrium" leaves a lot to the imagination, especially if it can be ignored. But, the formula actually looks fairly basic; {Total imports and costs/Total exports and costs} = Zero Difference If the sum isn't zero, then an adjustment is necessary. I'm sure the actual figures are much easier to understand lol; (1 for you / 1 for me) =  Big Picture; Bean counters always love complicated math. For example: Calculating gas prices to the tenth of a cent... International trade rules could certainly be simplified... Trump knows that.
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