Do you understand the math behind Trump's tariffs?

[AviatorTom]

In this video, mathematician Matt Parker explains the mathematics behind Trump's tariffs.

There's a complex equation, derived by the Trump administration, but basically it's quite simple.

The new tariff on each country's goods is equal to one-half the tariff that country places on US exports, with a minimum 10%.

Does it all make sense?

What do you think?

Updates

1 y

The video explains that the tariffs are trying to balance a trade deficit with each country. If the US has a trade deficit (imports greater than exports), the tariff is 1/2 the imbalance in percent. If the US has a trade balance or trade surplus (exports greater than imports), the tariff is a default 10%.

So, despite what Trump says, the reciprocal tariffs are not in response to each country's tariffs on US exports, but rather an attempt to improve the US's trade balance with each country.

[Jersey2]

The tariffs will definitely change things, for the better if we let them play out.

Vietnam has already offered zero percent tariffs. This can be a big growth opportunity for them as manufacturing will have cheap labor for cheap things like toys or plastic items. Even some more complex items. The US can then sell them more as we are tariffed about 50% for cars. Other items have tariffs with a blended rate of 10%. So the US and Vietnam win. China loses, others lose as well which is why they are worried. But the US is currently losing and this will change that.

Taiwan is moving some chip manufacturing to the US. We had it, we gave it away so we are getting some jobs back with this. This is great for higher paying jobs for the middle class. But it takes time.

10% higher costs is the push in the spreadsheets to do something such as get behind the tariff wall and into the US. Car manufacturers will do this as the tariffs announced there are to be permanent. This means more high paying jobs in the US as the math will now work for these items to be built in the US and once that happens the cost comes down by the tariff amount. All of these jobs lead to more jobs in local businesses.

Importantly, China made nothing 25 years ago. In 10 years they were coming in strong. Now they are a powerhouse. We can do that as well. This is all for the middle class and bringing people up from working class and poor. Democrats will shit on it because it is Trump led, we know that. They gave away many of these jobs to begin with such things as that “giant sucking sound” from NAFTA.

[WhiteSteve]

Really good analysis here from about 5:20 - 15:50-ish that everyone should hear….

https://www.youtube.com/embed/yDqoJIbrdc4

It needs to be understood that trade deficits are OK and will naturally occur. We need stuff other places have, and they don’t need, or in many cases can’t afford or can find cheaper alternatives to, American goods.

An example I heard yesterday: Madagascar produces 80-some% of the world’s vanilla. America produces 0%. We need, or at least want, vanilla. So we buy from Madagascar. But Madagascar is one of the poorest countries on Earth, they can’t afford high-quality American-made goods in most cases, so they don’t buy from us…. and that’s totally OK. They have something we want, but there’s nothing we can offer in return at their country’s necessary price points. Simple as that. Trade deficits kind of are what they are, they aren’t necessarily bad.

And the big thing I learned from this video is that physical “goods”, and NOT “services”, are not factored into the trade deficits. If someone in Madagascar subscribes to Netflix, that’s not recorded in the trade dealings, yet it contributes to American GDP numbers just the same.

Team Trump deliberately made this math equation confusing and unreadable by the average person on purpose, lmfao, what a bunch of absolute hustlers🤦‍♂️😂

[WhiteSteve]

I misspoke…. goods count, services don’t👍

[msmissydc]

So basically "The new tariff on each country's goods is equal to one-half the tariff that country places on US exports, with a minimum 10%." not that at all though.

Its not about tariffs placed on the U. S mainly. Its based around trade deficit (which is not only tariffs but much more), with a minimum of 10% even when you have a trade surplus. (which is kinda stupid but its trump so what to expect) The equation is actually explained quite well, but the problem as the video was saying, the equation looks more like an idea made into "mathiness" than actual math to get logical results.

The video is great to get into the math part of it all though thanks for sharing.

So yes I can now answer your question: Yes I do understand the math behind trumps Tarrifs.

[Arwen06]

Incorrect, it's nothing to do with the tariffs other countries place on the US. It's derived from the trade deficit / US imports then divided by 2. It essentially makes no sense regardless, they are being reckless and are deliberately creating a depression.

[OneViewpoint]

ROFL @ MAGA Math. So, the tRump toadies published a very mathy sciency looking formula. The MAGA morons said oooh ahhhh and were very impressed by all the symbols they never learned in math class and the very official sounding terms like elasticity of demand.

But the equation was nonsense. They fucked it up directionally. And the tRump toadies never did the research on elasticity of demand on a country by country, commodity by commodity level of detail. And in the end they ignored their own math and imposed a minimum 10% tariff on countries where the US has a trade surplus.

But the tRump toadies knew the MAGA morons are never gonna ask any questions and they wouldn't understand the answers anyway. So you can just lie to them. And the toadies did.

Why is any of this fucking comedy of analysis a surprise to anyone? These assholes came up with their numbers in a few days and applied the result across entire economies like peanut butter. It's just morons being morons again.

[Friendlybro79]

Well I'm saying this on behalf of my retired parents that depend on the discipline they had over their 40+ years of working that requires them to take large portions of their pay and invest in 401ks. The maths don't matter to my parents. My Dad is 72 and has lost enough so far that he might have to go back to work. I mean the GOP has said raise the working retirement age right? My Dad has said I guess they want us to never have peace on earth and we never can pay our debts to society.

He's just hoping the tariffs gets removed because another month of this and he has to return to work and hope that someone will hire him at 72.

[AviatorTom]

@Friendlybro79 There's a good reason why people should not panic, and instead be in the stock market for the long-term. It's 11am EDT in the US (8-Apr-2025) and markets all over the world are up between 1% and 4%.

[Friendlybro79]

I agree. Remember retirees are more sensitive to time. I have it but they don't. My father was also a financial advisor so we are educated in the area. This is never good at this age to swing down this much this fast.

Also, since the world is fighting us back in the tariffs, if Trump doesn't rescind them, it will spiral worse for older folks leaving them vulnerable. This isn't good for them. It's good for rich people who can take advantage of a low markert and buy more through dollar cost averaging. My parents have had health issues despite being in good shape so taking into consideration healthcare can bankrupt most people and this market collapsing downward has even left a very well prepared retiree vulnerable. Trump is using people like my parents as bait hoping this works

[Friendlybro79]

Also, if it's not obvious, I'm not meaning to be condescending towards your opinion. I'm upset for my parents and don't agree this is good for us as Americans.

[Effably]

The video makes perfect sense.

The simplified statement is rebuked by the video in the first minute.

The video version is basically saying that this is baby's first attempt at an elasticity demand equation, and they didn't get a passing grade.

The math is simple. The symbols are, placed wrong and the signs used, seriously * of all things, are awkward at best.

But yes. Its the perceived trade deficit as a percentage, slash in half add 10%.
I buy shoes from you for 100 bucks. You buy a hamburger from me for 30 bucks. I now claim you have a 70 percent tariff against me and retaliate with a 35 percent actual tariff.
It is all just very embarrassing.

[Spencer10]

OK I think you may be wrong about this. The tariff is calculated based on the trade deficit ( in a percentage) the USA has with each country divided in half. For example Vietnam has almost zero tariffs on USA goods. But it has a huge trade surplus with the USA. Surplus due to Vietnam being poor. Trade deficits are not tariffs. A deficit for the USA exists when the USA imports more goods from a country than it exports. How Trump came up with these trade imbalance numbers is a mystery though.

[loveslongnails]

Let's understand something even simpler:

Country "A" has some minerals worth billions to the US, but they're a "third world shithole" as Trump described them, with an extremely low average income per person and basically poor nationwide despite the minerals... think "Blood Diamonds". What can country "A" afford to buy from the US that equates to billions in minerals? Nothing, hence, big trade deficit.

Trump's trade deficit distraction ( Project 2025's actually) and its effect on the economy is no different than claiming that drag queens commit the most sexual assaults in the USA; total nonsense.

[Anonymous]

Do you understand that he is causing a global recession? It is quite simple.

https://www.npr.org/2025/04/06/nx-s1-5354258/global-markets-wall-street-trump-tariffs

[exitseven]

That is it in a nutshell. Trump has the moral high ground on this. The US has been ripped off for decades. Now we have a president that is not on the payroll for foreign governments and the liberals cannot stand it

[alice55]

I understand it it's pretty easy but I do not understand why he did not just asked for talking with other government instead of doing this out of the blue

[FreyaRed]

Economy isn't math lesson for fifth class and global production chains can't be replaced in few months or even at all.

[DrPepper12]

The math maths BUT that's not how trade works!! Surplus & deficit is a economic law of comparative advantage. Is he a capitalist or a mercantilist?

[Avicenna]

lol, Pepper, clearly the trade deficits aren’t due simply to comparative advantage, especially the one with China.

[RedInnocent69]

No one does. Because it’s made up. It doesn’t rely on actual tariff rates, but perceived “trade barriers” which includes foreign exchange rates. Evidently those penguins make it very difficult to trade, probably because they don’t know how

[msc545]

It make sense - what als make sense is that anyone you impose tariffs on will in turn impose them on you, and your businesses will pass those costs on - to you!

[Anonymous]

if tariffs are so bad, why aren't other countries bitching and complaining about their tariffs on US? oh I guess, it's only because it's Trump

[DryGermanGuy]

I doubt it’s that easy. The EU has 10% tariffs on American cars, the United States had 2,5% tariffs on European cars. Trump increased the tariffs tenfold to 25%. Sooo… 🤷‍♂️🤦‍♂️😵‍💫

[shortster]

Hopefully Trump is just trying to get rid of the tariffs on US goods. That or getting rid of the income tax.

[dragoblack]

What usa goods? Agriculture? The usa doesn't have much in terms of export besides overly processed food that's filled with too much salt & sugar. Tariffs on other countries only hurts the usa because it makes companies charge the consumors more and over-inflate the economy. The companies love the record profits in their next quarter, but the prices never go back down.

[shortster]

There are a handful of goods made in the US. Plus if you get rid of the tariffs in other countries there becomes an incentive for companies to make more goods in the US. Salt and sugar are important for brain function. As neurotransmitters trigger the release of one of for salt ions and the brain only burns sugar for energy.

[dragoblack]

Salt and sugar are good for brain function... in proper doses. 2300mg is your daily sodium. When 1 snack has 80% of your daily amount of sodium and 1/3 of your daily amount of sugar and meals have 130% of your daily sodium and 60% of your daily sugar, them you can easily overdose on salt and sugar. Snacks should have at most 3%-10% of your daily sodium and meals should have 20%-30% of your daily sodium. It should be even less so for sugar because the body processes so much into sugar already. Overdosing sodium causes liver, kidney, & organ damage, along with water retaining. Overdose of sugar causes high cholesterol, weight gain, appendix damage, and irregularity to the hormone balance of the body.
It's a big reason of why there is a major obesity issue in the usa aside from all of the other artificial sweeteners and junk that damages our bodies.

[shortster]

I consume more salt and sugar than anyone I know and don't suffer from any of those problems. In fact the last time I went to the doctor's office to get the results of my blood work. The doctor said my fasting plasma glucose looked immaculate. All of my other numbers were in the healthy range. The problem isn't salt or sugar; it is all of this fake foods. All of these diet foods that use chemicals to replace salt, sugar, fat, and cholesterol. Our bodies don't know what to do with that junk and it causes health issues. Whereas if you just eat normal foods the worst thing is you get fat.

[OlderAndWiser]

Economics is not my forte!

[KostasKouvalis]

Not at all. Only Brazil's makes sense. 10% for 10%. The rest, he only charged half or not even. If he really wants to even the playing field he should be charging the same percentage that they're charging US

[sage2021]

I am not a left brain person and I don't understand math at all. Except to keep my checkbook on spot.

[Dargil]

This may be simplist (I am). DJT wants identical tariffs and identical import regulations with every trading partner. A flat playing field.

[Pohjolan]

The new tariff on each country's goods is equal to one-half the tariff that country places on US exports,

This is a lie.

[Anonymous]

Human beings don't always act in a rational fashion though. Understanding that matters too.

[NathanDavis]

I went to school... lol

[dougeats]

I understand he is putting us in a recession

[Bklynbadboy12]

Trump doesn't understand the math behind his tariffs

[chrissykerdock]

makes a lot of sense perhaps your not smat

[beefcakebradybatson]

Nor does he !!!