Is Donald Trump's Tariff Plan Groovy or Just Downright Shagadelic!?

Yeah Baby Tariffs! But What's the Formula Baby!?

Alright party people! Austin Powers here ready to dive headfirst into the swirling vortex of… tariffs! Oh behave! Seems our mate Donald Trump has been slapping these things on like they're going out of style. But hold on a tick is it all just smoke and mirrors baby? Economists are scratching their heads saying the whole thing is based on wonky assumptions. Seems a bit shagadelic doesn't it?

Trade Deficits and Exports Oh My! It's a Numbers Game Baby!

So what's the secret sauce? Apparently Trump's formula involves dividing the country's trade deficit with the U.S. by its exports and then… wait for it… dividing that by two! That's like trying to figure out who stole my mojo using a banana and a calculator! And to top it off there's a cheeky 10% baseline tariff on pretty much everyone. Groovy baby NOT!

Elasticity Schmelasticity! It's All About the Bounce Baby!

Here's where it gets a bit hairy baby! Some brainy blokes at the American Enterprise Institute Kevin Corinth and Stan Veuger (sounds like a pair of Bond villains if you ask me!) are saying Trump's using the wrong 'elasticity' rate. Apparently it's all about how much import prices bounce around when tariffs are applied. Trump's assuming it's a teeny tiny 0.25 but these guys reckon it's closer to 1.0. Big difference baby! It's the difference between a Mini Cooper and a Jaguar E Type!

Retail Prices vs. Import Prices! A Most Frightening Mistake!

These brainiacs say Trump's making a most 'frightening mistake'! He's basing the elasticity on how retail prices react not import prices. It's like judging a swimming competition based on how well the audience is clapping! If they get the numbers right tariffs wouldn't be nearly as high. No country would exceed 14% and most would chill at 10%. Shag me that's a big difference!

Lesotho We Have a Problem! 50% Becomes 13.2%!?

Take Lesotho for example baby! They're getting slapped with a whopping 50% tariff. But if we adjust the assumptions that drops to a much more manageable 13.2%. That's like turning Dr. Evil into a fluffy kitten! Even the Cato Institute is chiming in saying Trump's numbers are inflated. In 2023 China's trade weighted average tariff rate was 3% but the Trump administration said it was 67%! Are you kidding me!?

Is This Trump's Mojo Gone Wrong? Lets Investigate Baby!

So there you have it my groovy cats! It seems like this tariff formula might be a bit of a head scratcher. Is it a deliberate ploy or just a case of some seriously funky math? Only time will tell baby! But one thing's for sure Austin Powers will be watching ready to unleash the power of love (and a few well placed karate chops) if things get too out of hand! Oh behave!