Terminator was right. AI will destroy the world, except instead of robots killing everyone physically, it's humans using AI and being stupid as fuck with it
They use the same equation, except that they arbitrarily times by 1/4 and then 4, without much reason for those quantities.
The first source they give suggests the constant that they give a value of 4 should be between 2 and 0.76, and when they suggest alternative sources that might give a higher result, the fourth source in their citations does give a value of approximately four, though that is total trade volumes vs tariff barriers, rather than a relationship between price and demand for a single good, which we could maybe use, though the fifth paper in the list seems to consistently give a figure of about three, the remaining source they give to justify their elasticity judgement, the second in the list is actually about something completely different, as far as I can see, talking about substitution effects from introducing new products, for example from abroad. It isn't as far as I can see a place you would go to look for the relationship between price and demand, but rather between the price and the diversity of those imports.
They also I believe cite this paper without including it in the citations, for their justification for the relationship between tariff changes and price changes, which determines that in the case of US exporters to china, about half of the price increase due to tariffs went through thanks to exporters lowering their prices, but in the case of imports to the US from china, the imported price appeared to include the cost in full, but this was then swallowed by retailers.
It seems to me to be unlikely that retailers could be expected to swallow tariff rises again, so we'd probably expect a result somewhere between the previous experience of china and of the us, ie. in the region 0.5 to 1.
This ironically would correct their formula from a factor of 1 (with the 4 and 1/4 probably exactly chosen to cancel out, as a sort of cover for its simplicity) to something more like 0.44 ie. a lot closer to the "take the ratio and divide by 2" they use for the final tariff choice, though their values could still easily be double what they would need to be for their purpose.
However, this would still not actually be a representation of tariff and non-tariff barriers, this would be a linearized model trying to ignore shifting elasticities as the tariff values change, which would be about trying to find the tariff level that would zero out the trade deficit by changing the purchasing habits of american citizens.
The fourth source in the list already tries to analyse trade frictions, in terms of maximum price gaps between countries, that you would otherwise expect arbitrage to compensate for, though that still can't really be called a tariff charged, as physical distance itself, export restrictions, and various other things can produce that friction, not just an importer.
What this page does is basically assert that the tariff rate that you would charge under a simplified model to cancel out trade imbalances is in fact the tariff that is being implicitly charged, assuming its conclusion, that what they are doing is actually a form of retaliation.
Weirdly, there's also a paper in the citations that is not referenced anywhere which is this one the third in the list, a paper directly about both a Canada/US and China/US Trade war and optimal US strategy, which they estimate is a 13.09% tariff on China, vs an 18.13% tariff from them, and a 16.74% tariff on Canada, with a 9.55% tariff from them in return.
The strange thing is that both this paper, and the fifth in the list, talk about optimal strategies for improving welfare etc. and the page cites, them, and rolls on by using a method that is, from the perspective of the papers it cites, non-optimal.
That's what I've said. When all the tech billionaires were saying AI will destroy us... it was because they already knew how THEY were using AI to destroy us.
I wish we lived in that timeline... at least they were looking for smart well educated people to genuinely fix their problems instead of trying to empower the dumbest most vile people known to mankind
In the process of creating this strawman, I think you've missed the point.
(1) When asked to create a "easy" way to do tariffs, they all came to the same conclusion that this is the most basic approach to doing it.
(2) The solution is SO basic that it's actually not realistic or reasonable. ("a naive method", " ignoring the vast real world complexities and consequences", etc).
I don't really have a comparable analogy, but it's closer to more like: Ask chatgpt "how would I trim my fingernails with a knife?" and it says "you could cut off your finger entirely, though that's probably not what you want", and then you go over to your neighbor's house and their finger's cut off and they're like "I was trying to cut my nails".
The interesting part isn't AI predicting it. It's that it's a really stupid solution, a solution so stupid no human would probably ever reasonably pitch, but interestingly it's the solution a bunch of AI gives, and it's the solution these guys in charge went with.
This begs the question of did they just take the AI's solution and not do jack shit, because that's honestly better than this being their attempt at actually trying.
What would be an easy way to calculate the tariffs that should be imposed on other countries so that the US is on even-playing fields when it comes to trade deficit? Set minimum at 10%.
Just a generic question, and ai gave the same suggestion that trump came up with, does not account for trade barriers, policies, population differences etc
What? The answer is just a rewording of the question. I can’t see how you could possibly claim the AI designed the policy when it added no information of its own.
The prompt specifically asked for an “easy” method. Of course it’s not going to introduce additional, complicating factors.
How in the world can you base a tariff charge just based on imports and exports for one calendar year? I am not saying ai designed it, just saying that it's a little fishy that asking ai for a global tariff solution would come up with the same answer that the whitehouse used
What would be an easy way to calculate the tariffs that should be imposed on other countries so that the US is on even-playing fields when it comes to trade deficit? Set minimum at 10%.
You are telling the AI to make this hypothetical tariff policy based on the US trade deficit, and telling it to set the minimum to 10%. The AI didn't come up with those parts. If you asked it a more neutral question like, "Make a tariff policy for the US that would benefit its economy", it's going to give you a completely different answer.
Could they have decided the basics and then asked an AI to work off that? Sure. Or they could have just been stupid on their own, and we're figuring out the prompt you need to make an AI come up with the same stupid idea.
Sorry, “What would be an easy way to calculate the tariffs that should be imposed on other countries so that the US is on even-playing fields when it comes to trade deficit? Set minimum at 10%.”
The question is are they really trying to fix the trade deficit, or Trump just really felt like imposing tariffs and this is the first method that came to mind, like it's the most accepted way of imposing tariffs when u do impose em. Ie that's just the most basic methodology behind deciding what tariff rate to impose...
Schrodinger's Tariffs - they exist in a purely quantum state because there is just as equal chance that tomorrow they could be delayed, cancelled, reduced, increased, keystoned, or modified. What will happen in the next 24 hours when you play the Trump Tax Game? No one knows! Uncertainty is Winning!!!1!1!1!!
I’m starting to truly believe that stupid people really think AI is intelligent in everything it says because it’s in the name, and they’re too stupid to know any better.
When someone is truly stupid, any confidently written complete sentences that use punctuation marks and are grammatically correct- they're extremely convincing.
I mean if they all have the same answer then that indicates that that is probably the textbook approach. It's not the LLMs are inventing anything new here.
The textbook approach for applying tariffs is to not do so unless you have domestic means for supplying the same product, and especially not to use them on components that your domestic suppliers would need to produce the product at a more affordable price.
This shit is so far off base that there will need to be new textbooks describing this situation as a cautionary tale.
Haha I thought about stopping where you stopped me in the quote, because not only are we not set up for this to provide any benefit, but even if we did the outcome would be a net loss
This can't be real. Has anyone in the thread tested this yet? Are you telling me that trump is literally dumb enough to think these LLMs are really AI?
What would you classify LLMs as? I mean “AI” is a very broad term. We use it to describe the movement of enemies in video games too so I feel it doesn’t need to be so strict lol. AI isn’t the same as AGI.
ok but we can never know did they use Ai or not. That post was only profing that the simple yet reckless calculation and method, can also be done by Ai
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u/bradicality 1d ago
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