I originally wrote this on April 8, and the drama has been developing and dramatic daily. I am updating the data but keeping the same points. The PRC's stock (SSE Composite Index) dropped 3.5% since Trump's liberation (tariff announcement) on April 2, while the PRC's mouthpieces doing non-stop saber-rattling. The PRC's counter-tariff rate has gone from 34% to 84% and is at 125% now. Though PRC stock market is essential a casino, its fluctuations do reflect street sentiments. However, the PRC government appears to be coordinating the effort to prop up the casino according to their mouthpieces. However, the street sentiment is not necessarily the same as the only sentiment that matters - the middle school dropout's sentiment. IMHO, one possibility is the following: The middle school dropout is known to admire the monster Mao, who purged his father, and recently restored the worship of Mao. He may choose to fight this trade war by following in the footsteps of Mao for ...

The essence of Trump tariff calculation: for a given country, it is the value that would bring the US trade deficit with this country to zero . In theory (according to the equation), the tariffs for countries with which the US has trade surpluses (e.g., Netherlands, UK, Australis...) should be negative. However, Trump puts a floor for the reciprocal tariffs: 10%. He also puts a ceiling: 99%. For example, the US tariff for Vietnam needs to be 90.4% to balance the trade according to their calculation. Out of kindness and generosity, Trump imposes a 46% tariff (about half of 90.4%) on Vietnam. x i (exports to Vietnam) = $13.1B m i (imports from Vietnam) = $136.6B ε (elasticity of imports) = -4 φ (passthrough from tariffs to import prices) = 0.25 Trump's tariff calculation has little to do with conventional tariffs. Vietnam's tariffs on US goods are 9.4% on average. This number is not even included in the calculation.  Ideally, Trump should use a different term for the perceived ...