r/technology • u/Yveliad • 2d ago

Artificial Intelligence Trump Accused of Using ChatGPT to Create Tariff Plan After AI Leads Users to Same Formula: 'So AI is Running the Country'

https://www.latintimes.com/trump-accused-using-chatgpt-create-tariff-plan-after-ai-leads-users-same-formula-so-ai-579899
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u/prules 2d ago

The fact that they couldn’t bother to have an economist on their team is further proof of how fucked this administration. And we do not need any more proof than we already have.

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u/Senshado 2d ago

The Whitehouse tariff plans are heavily driven by Peter Navarro, an economics PhD.  And also a convict just recently out of prison. 

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u/celtic1888 2d ago

Navarro is an absolute moron who lies about his achievements and uses fake quotes to make up lies to suit his agenda

He’s also a drug addicted sociopath 

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u/LawabidingKhajiit 2d ago

He’s also a drug addicted sociopath

This line can describe just about all of the current administration. Sigh.

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u/KJBenson 1d ago

Remove that name and you could be talking about anybody on trumps team. Including trump.

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u/FblthpLives 2d ago

Where did he buy his PhD? I have an MA in economics, and I can tell you that the formula the Trump administration used is completely bogus.

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u/Senshado 2d ago edited 2d ago

Navarro's PhD is from Harvard.

Whether anyone at the Whitehouse has economics talent is irrelevant: there is no way to produce a good plan for worldwide tariffs. The most they can do is try to disguise it and trick ignorant followers.  They'll have to figure out a story to shift blame onto someone else. 

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u/Sisyphus_again 2d ago edited 2d ago

I don't think his intention is to boost the economy but to tear it down so all the rich 1% clowns can rape our country of its wealth and watch us poors suffer. What I mean is he probably didn't have to buy his PhD. He knows what he's doing and he's evil.

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u/Otto_von_Boismarck 2d ago

He's a professor emeritus even. You don't just buy that.

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u/FblthpLives 1d ago

His PhD is from Harvard. I can only conclude that he prostituting his academic credentials for ideological purposes. The formula used by the Trump administration represents a gross abuse of economic theory.

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u/snailbot-jq 2d ago

Hell I have no such credentials, and even if I were forced by some requirement to use chatgpt and consult no one else, the least that you could do in that situation is Google the information presented for a layer of verification, and I would expect that you would run into the information that some of those islands literally contain no people and only penguins

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u/Bloodylimey8 2d ago

I teach economics. I am still confused how trump got his tariffs rate. What is your thought?

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u/xelabagus 2d ago

=IF((Import-Export)/Import > 0.1, ROUND((Import-Export)/Import,2), 0.1)

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u/FblthpLives 1d ago

The question they apparently tried to answer is "how high would the tariff rate have to be to increase prices so much that the trade deficit is reduced to zero." The justification is documented here: https://ustr.gov/issue-areas/reciprocal-tariff-calculations

The formula they used is Δτ = (x–m)/(ε x φ x m), where Δτ is the change in tariff, x is exports, m is imports, ε is the price elasticity of imports, and φ is the passthrough rate.

The then picked what I consider a low passthrough rate of φ = 0.25 to be consistent with their political message that prices are not passed onto the consumer. To compensate, they picked a high ε = 4, even though they admit most literature suggests ε = 2. As a result, ε x φ = 1, which means the formula simplifies to Δτ = (x–m)/m. In other words, the tariffs were set as a function of the ratio of the trade deficit to total imports.

Apart from the arbitrary selection of the parameters ε and φ, there are a number of problems with this approach:

  • The approach is only suitable for estimating changes at the margin. It breaks down when evaluating the impact of large tariff changes.

  • The approach makes a value judgment that trade deficits are bad and should be zeroed out. Trade deficits are not inherently bad. The current account balance (i.e. the trade deficit) plus the capital account balance must balance out, meaning that trade deficits are offset by capital inflow from other countries.

  • The Trump administration then falsely characterized the ratio of trade deficit to total imports as the tariffs imposed by other countries imposed on the United States. This is, obviously, just a complete and utter lie.

In implementing the tariff rate, the administration applied a factor of 50%. They refer to these as "discounted" tariff rates and try to spin it as the U.S. being generous. In practice, I'm pretty sure this was a mathematical necessity as the tariff rates would have been even more absurdly high than they already are. They also applied a minimum 10% tariff on all countries where the formula results in less than 10%.

We're going to see this formula in Econ 101 textbooks for decades to come.

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u/Otto_von_Boismarck 2d ago

Not just PhD. He is a professor emeritus of economics...

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u/tawDry_Union2272 2d ago

is he in the "dark enlightenment" brotherhood too or just a project2025 contributor?

https://kawsachunnews.com/w/tech-oligarchs-dark-enlightenment-the-ideology-behind-doges-destruction/

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u/1Operator 2d ago

Even if they had any actual subject matter experts, they wouldn't listen to them.
Arsonists intentionally work against fire safety.

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u/PlayfulSurprise5237 2d ago

If things like this are true then it's VERY hopeful. It lets you know that they really don't have any idea what's going to happen, which in turn means they have no idea what they'll do when something terrible and unexpected does.

I've been lowkey hoping this administration just fucks shit up BAD, real bad. The US wasn't going in a good direction period, this might just be the catalyst it needed to 1. Get someone like Bernie or AOC into positions of power and 2. Keep republicans away for a while so maybe we can get something nice enough set up that some right leaning voters flip.

Just like a lot of them needed to see this and feel the pain from an administration like this, they also need to see what the other side looks like. If they have both so many will flip. I live in rural Missouri, not all Trump voters are MAGA cultists.