Donald Trump has never been great at math. Here he is on a 2006 episode of the Howard Stern Show with Ivanka and Donald Trump Jr, all of them trying to calculate 17 × 6 in their heads in order to prove they were smart enough to get into the Wharton School of Business on their own merits.
TRUMP JR: Ninetyyy… six?
HOWARD: Wrong! buzzer
IVANKA: See, that’s not a practical application, though.
TRUMP JR: Ninetyyyy… four?
HOWARD: Wrong! buzzer
TRUMP: One… one…
ROBIN: Wait Donald’s going to answer.
TRUMP: It’s eleven… It’s eleven-twelve. It’s one twelve. [112.]
The brain trust in the room believes Father Trump probably got it right. A highly confident Donald Trump—who ten years later will be elected President of the United States of America—then walks us through the halls of his ratiocination: “Seven plus four.” Doubt, however, quickly sets in, and the room explodes into a cacophonous Greek chorus of incorrect mental math. At one point Trump Jr. pipes up to inform us the right answer would be “six times twenty, minus two times six.” (That would be 108.) Ivanka, slightly more intelligent than her dad and brother, never answers.
The correct answer, of course, is 102.
Turns out getting elected President of the United States doesn’t mean you’re smart, and it doesn’t make you smart. Trump was back at the bathroom abacus this morning, pumping out a mystifying series of tweets in which he tried to explain how his new tariff war on China would make the United States a lot of money. In an echo of the Howard Stern fiasco, it seems an aide must have checked him on his math, because he deleted the thread. But apparently he thought twice, counted on his fingers, and with conviction anew reposted the insane thing without any substantive edits. Here it is:
Not only is Trump doing bad toilet math again, he’s doing it based on his fundamental misunderstanding of his own tariff policy. But tariffs are essentially taxes on American consumers.
In a moment we’ll try to navigate that thread tweet by tweet, but to set the table for why this is now meta-ridiculous: When Trump made his original tariff pitch last year, he wrongly framed tariffs as a sort of tax foreign countries (in this case China) pay the U.S. government for the privilege of importing their products to the United States. This, he wrongly concluded, will tilt what he wrongly perceives as an unfair trade imbalance in the U.S.’ favor, thereby making money for the U.S. government. Last year, for instance, Trump wrongly said, “China’s now paying us billions of dollars in tariffs and hopefully we’ll be able to work something out.” Here’s one such tweet:
There are quite a few things wrong with this. First, none of this money goes directly to the U.S. Treasury. Some might eventually find its way into the government via corporate taxes, if certain companies end up making more money. (But tariffs slow our economy.) The whole purpose of tariffs (essentially an extra tax) is to make the prices of certain goods imported from certain countries so high that U.S. companies stop buying those goods, so they’ll either buy them from companies from other countries, buy American, or make those products here. In reality, though, tariffs are a tax on American consumers. Here’s how it works:
—The Chinese government doesn’t pay the U.S. government anything: We put tariffs on specific products foreign companies import into the U.S.—we don’t impose tariffs on foreign governments. This is all between private companies.
—Second, tariffs aren’t a sort of extra cost for the privilege of doing business with the United States. Tariffs raise the price American importers pay for foreign products. Those foreign companies don’t pay us anything. They simply might not sell us as many products.
—Those U.S. companies then either eat the higher cost they pay for those goods or, as is usually the case, they pass it on to consumers in the form of higher prices.
Trump’s initial trade war with China had a number of unintended consequences anyone could have seen coming. For instance, China responded by putting its own tariffs on U.S. agriculture products, so Trump, facing angry heartland voters, bailed out American farmers. In other words, he paid them not to sell their products. Also, U.S. manufacturers that use aluminum and steel came out on the losing end, as did American consumers who end up paying for the whole charade.
Anyway, let’s take this new false premise and do the math tweet by tweet.
Tweet one: “Talks with China continue in a very congenial manner – there is absolutely no need to rush – as Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products. These massive payments go directly to the Treasury of the U.S….”
Okay, so China is paying the U.S. government 25% of $250 billion, which is $62.5 billion. First, if these truly are tariffs, China isn’t paying this to the U.S. Treasury. But okay. We have some sort of baseline, I guess.
Tweet two: ”....The process has begun to place additional Tariffs at 25% on the remaining 325 Billion Dollars. The U.S. only sells China approximately 100 Billion Dollars of goods & products, a very big imbalance. With the over 100 Billion Dollars in Tariffs that we take in, we will buy…..”
Honestly I’m already lost, but let’s take a crack at it. There are apparently another $325 billion of goods we buy from China, which means we import a total of $575 billion from China. This number is wrong (it’s $539.5 billion) but let’s say it’s right. So if we tax that extra ”$325 billion” at 25%, we get $81.25 billion. (And again, if these are tariffs, the U.S. Treasury doesn’t get this from China. This is what U.S. companies would pay to Chinese companies.)
Put this together with the $62.5 billion we already “take in” (sorry but I can’t emphasize just how backwards this is), and we “make” $143.75 billion. Trump also says we sell China $100 billion in U.S. goods (pretend for a moment that’s the real number, not the true $120 billion), implying he thinks this new fictional $100 billion tariff profit China will pay us for the pleasure of importing goods will DOUBLE our trade revenue with China, which again is not at all how any of this works. At all. (Later he recognizes this contradiction and then somehow ignores it so his math works.)
Anyway, he ends this tweet with the wrong number—actually underselling himself, weirdly—because he could say we’d have $144 billion, not the $100 billion he did. Unless that $100 billion refers to what we “make” now ($62.5 billion), not what we’ll “make” in the future with new tariffs, which would be more in line with Trump’s wild exaggerations in his favor. Who knows.
Tweet three: ”...agricultural products from our Great Farmers, in larger amounts than China ever did, and ship it to poor & starving countries in the form of humanitarian assistance. In the meantime we will continue to negotiate with China in the hopes that they do not again try to redo deal!”
Okay, so “we” are going to take that $144 billion (again, maybe not even the thing he’s talking about, and it doesn’t even go to the U.S. government but whatever) and the U.S. government is going to use it to once again bail out our farmers. This is anticipation of China’s tariff retaliation, which will once again hit U.S. farmers hard. Until last year China was the largest agricultural goods market for the United States. In 2017 Chinese companies bought about $24 billion in U.S. ag company exports, but last year that dropped to about $16 billion. The U.S.D.A. projects that will fall to $9 billion this year, thanks to Trump.
So now the U.S. government is going to vacuum up agricultural products U.S. farmers can’t any longer sell to China, many of whom already produce a surplus—surpluses which, of course, the trade war has increased. So how much do we spend creating this new artificial government-specific market?
Tweets four and five: “Tariffs will bring in FAR MORE wealth to our Country than even a phenomenal deal of the traditional kind. Also, much easier & quicker to do. Our Farmers will do better, faster, and starving nations can now be helped. Waivers on some products will be granted, or go to new source! ....If we bought 15 Billion Dollars of Agriculture from our Farmers, far more than China buys now, we would have more than 85 Billion Dollars left over for new Infrastructure, Healthcare, or anything else. China would greatly slow down, and we would automatically speed up!”
Okay, stick with me: If the U.S. government buys $15 billion in ag products in order to make up for what China won’t buy, the U.S. government (not the actual domestic consumer market in the U.S.) will become our own third-largest agriculture trading partner. And because consumers won’t be buying that stuff, the government has to figure out what to do with it, and Trump’s brilliant businessman money-making solution is just to GIVE IT ALL AWAY to countries that, in order for us to “speed up,” would have to actually develop a greater need for food aid over time, which, obviously, our food aid itself would seem to prohibit. The remaining $85 billion (out of that still-unexplained $100 billion) would go to healthcare and infrastructure. And hopefully the Special Olympics.
But again, we’re back at that $100 billion figure from before, and that wouldn’t be the same figure, considering Trump’s self-dealing plan subsidizes some of our trade losses with China. So if the trade war ONLY affected ag trade (it will affect much more), that would knock our total exports down about $15 million from where they were in 2017, before this all started. Essentially, Trump would take $15 billion from fake revenue and use it to offset $15 billion in real losses. Then we have a fake $85 billion left over to do whatever the hell we want. But at the same time we would also have managed to DECREASE sales to China, which will further INCREASE our trade deficit (it’s at an all-time high of $420 billion, ballooning up about $40 billion during Trump’s trade war last year), which this is all meant to stop in the first place.
And the contradiction Trump ignores in order to make this all “work out”: That China will keep trading at the SAME VOLUME with the U.S., which is where he gets this $100 billion in tariff profits from—but at the same time he says China will DECREASE trade, which is why we have to put some of the tariff money towards those losses in the first place. So there won’t be $100 billion. Unless Trump thinks we’ll sell LESS to China but BUY at the same rate—for which privilege China will (wrongly) pay us in the form of tariffs—which would of course increase the trade deficit. Basically, Trump is funding a trade deficit, bail out our farmers, and trying to mop up a food surplus with toilet math. Unless, now that I think of it, he also thinks wrongly that tariffs can also be taxes that China pays us for our exports, which might also be in there somewhere…I have no idea.
But again, that’s actually the opposite of how this works in every imaginable way. In the end, this is all on the backs of consumers, so under Trump’s make-believe plan you and I would pay higher prices so U.S. companies can afford to buy Chinese products or produce their own, in which case some of the money made on those marginal profits will go to the U.S. government next year (whoops—never mind! Corporate tax cuts!) so that we can then give away about 12% of the food we produce to other countries. For free.
It’s Friday afternoon, the president of the United States is literally stupid, and I’m getting a drink.