Trump's "trade barriers" figures are actually the proportion of trade deficit to imports into the USA

[muriel_volestrangler]

8. Deutsche Bank: "raises serious concerns about policy credibility" - you don't say????

Deutsche Bank say this approach to calculating the tariffs “raises serious concerns about policy credibility, undermining the USD [the dollar].”

They draw three conclusions:

First, the US administration is squarely focused on penalizing countries with larger trade deficits in goods (services are ignored). This determination is highly mechanical, rather than a sophisticated assessment of tariff and non-tariff barriers. It is also in line with the declaration of a national emergency on the trade deficit used as a legal justification for the tariffs.

Second, there is a very large disconnect between communication in recent weeks of an in-depth policy assessment of bilateral trade relationships with different countries versus the reality of the policy outcome. We worry this risks lowering the policy credibility of the administration on a forward-looking basis. The market may question the extent to which a sufficiently structured planning process for major economic decisions is taking place. After all, this is the biggest trade policy shift from the US in a century. Crucially, major additional fiscal decisions are lining up over the next two months.

Third, the tariff calculation approach arguably makes for a more free-wheeling and open-ended nature to potential trade negotiations in coming months. It seems there are no specific and identifiable policy asks per se but ultimately a desire to reduce bilateral trade imbalances.

https://www.theguardian.com/us-news/live/2025/apr/03/business-news-live-updates-trump-tarrifs-asian-markets-nikkei-asx-wall-st-dow-jones-dollar-euro?CMP=share_btn_url&page=with%3Ablock-67ee42e78f08188975c64626#block-67ee42e78f08188975c64626

So they've taken a figure - deficit to import ratio - and lied about what the figure is, saying it shows how every country in the world, including islands only inhabited by penguins, are "ripping off" the USA. They've then ignored trade in services, only looking at goods figures. So this is like a farmer selling $100 of meat to a restaurant, and then coming in to have a meal and paying $100. Rather than seeing this as normal trade, this is like the restaurateur saying "you ripped me off! I paid you $100! That's 100% currency manipulation and trade barriers! I'm putting a 50% tax on my employees' wages until you buy something physical from me".

This is the economics of insanity.