Trump's Tariff Formula Makes No Economic Sense. It's Also Based on an Error

Impact on Poor Countries and Workers

• Commenters focus on Lesotho as a stark example: large US-bound garment exports, many low-paid workers, and a 50% tariff threatening tens of thousands of jobs.
• Some argue tariffs should penalize very low-wage production to reduce exploitation and level the playing field with higher-wage producers.
• Others counter that such tariffs mostly destroy jobs in poor countries rather than raise wages, and that many proposals assume “magic” new wealth without addressing local productivity or development constraints.

Tariffs as Wage / Standards Lever vs Protectionism

• One camp envisions “minimum wage on imports,” or tying low tariffs to verified labor standards in trade agreements, pointing to existing clauses (e.g., in North American auto rules).
• Skeptics say this is really dressed-up protectionism and note that firms can respond by cutting margins instead of raising wages.
• There is disagreement whether broad, blunt tariffs can realistically improve global labor or environmental standards.

Flaws in the Tariff Formula and Implementation

• The official “reciprocal tariff” formula is criticized for:
  • Using only goods (ignoring services).
  • Treating trade deficits as if they directly measure foreign tariffs.
  • Including VAT and local taxes as if they were tariffs.
  • Using an elasticity constant suited to retail prices, not border prices, allegedly inflating “reciprocal” rates by ~4x.
• The formula’s structure punishes countries that import little from the US, which often means the poorest economies.
• The country list appears error-prone: tiny territories, uninhabited islands, and ccTLD-based “countries” get specific rates; Russia is conspicuously absent.
• Some suspect an intern/Excel job or even LLM assistance, but that is speculative in-thread and unresolved.

Perceived Motives: Incompetence, Strategy, or Corruption

• One view: this is pure incompetence and economic illiteracy, extending a decades-long personal obsession with tariffs and trade deficits.
• Another: this is deliberate “shock and negotiate” padding—announce extreme rates, tank markets, then partially back down for leverage and possibly personal financial gain (options, shorting, patronage).
• A minority frames it as coherent grand strategy to weaken China, devalue the dollar, and force global renegotiation under US military and financial leverage; others respond that alienating allies and eroding trust makes that implausible.

Geopolitics, Power, and Democracy

• Several see tariffs as accelerating US soft-power collapse and China’s rise, with allies starting to coordinate responses or seek alternatives.
• Some worry this manufactured economic crisis could be used to justify emergency powers and further “consolidation of power,” drawing parallels to other authoritarian trajectories.
• There is also meta-discussion on shifting left/right positions on trade and the difficulty of maintaining nuanced views in polarized politics.