The mistake in Trump’s tariff formula

Episode Summary

Executive Summary: This episode examines three fact-checking stories: US “reciprocal” tariffs built on a misleading formula that likely overstates trade barriers; an audit revealing England and Wales have far fewer neighborhood police officers than previously reported; and Wandsworth Council’s claim to have frozen council tax despite raising its share via the adult social care precept. It closes with a scientific look at whether redheads really feel less pain and why the evidence is mixed.

Main Topics: US tariff formula and trade deficits (Priority: 5/5): The show dissects the Trump administration’s claimed reciprocal tariff formula, arguing it is not truly reciprocal and that its assumptions and parameter choices produce inflated tariffs that won’t solve the US trade deficit. Fake complexity in tariff calculations (Priority: 5/5): The White House presented a complicated equation with Greek letters, but the episode argues the added terms effectively cancel out and were based on implausible values, making the process appear more rigorous than it was. Neighborhood policing counts in England and Wales (Priority: 4/5): A government data validation exercise found thousands fewer officers in neighborhood policing than previously reported, raising questions about how policing categories were defined and counted over time. Wandsworth council tax and the ‘freeze’ claim (Priority: 4/5): The episode explains that Wandsworth’s claim of a council tax freeze is misleading because the council increased the adult social care precept, meaning the council-controlled portion of the bill rose by 2%. Redheads and pain tolerance (Priority: 3/5): The final segment explores research on the MC1R gene and pain perception, showing evidence that redheads may tolerate more electrical pain but that findings differ by pain type and by whether subjects truly had MC1R variants.

Key Arguments: The US tariff policy was based mainly on bilateral trade deficits, not genuine reciprocal tariff rates or a sophisticated assessment of trade barriers. The added Greek-letter parameters in the tariff formula were mathematically neutral in practice because the chosen values multiplied to 1, but the chosen inputs were likely too low and therefore inflated tariffs. Trade deficits are driven by macroeconomics—especially the gap between US saving and investment—not simply by tariff policy, so tariffs alone cannot eliminate them. The neighborhood policing numbers changed because of both definitional slippage and auditing corrections; public visibility of patrols has also fallen sharply over time. Wandsworth’s wording obscures that a 2% rise in the adult social care precept still means a 2% increase in the council tax bill it controls; calling it a freeze is misleading. Redhead pain research is suggestive but not settled: one experiment found higher tolerance to electrical pain, while other findings point to differences in thermal pain and to genetic complexity beyond hair color alone.

Data Points: Average EU tariff on US goods: 1–5% - Used to show the US “reciprocal” tariff on the EU was far higher than actual EU tariffs US tariff on the EU: 20% - Example of the administration’s reciprocal tariff outcome US tariff on Switzerland: 31% - Despite Switzerland imposing virtually no tariffs on US imports Neighborhood police officers previously reported: 13,424 - Last published figure before the data validation exercise Amended neighborhood police officers: 10,664 - Corrected figure after validation Reduction in neighborhood police officers: 2,700+ - Equivalent to about 21% fewer than previously reported Police community support officers previously reported: 6,210 - Earlier figure before validation Police community support officers amended: 6,359 - Corrected upward after validation Increase in PCSO count: 149 - Represents just over 2% increase Police officers in England and Wales: 147,000 - Workforce total as of September 2024 Police community support officers in England and Wales: 7,417 - Workforce total as of September 2024 Highly visible foot patrols reported by public in 2009-2012: 40% - Crime Survey for England and Wales measure Highly visible foot patrols reported by public in 2023-24: 12% - Shows perceived decline in neighborhood presence Wandsworth main council tax element change: 0% claimed / 2% actual increase overall - Council said it froze the main element, but the bill it controls rose by 2% Adult social care precept allowed by government: 2% - Extra amount councils may add on top of the 3% council tax cap Total possible council tax increase cap: 5% - 3% standard cap plus 2% social care precept Electrical pain tolerance in study: 16 mA vs 21 mA - Non-redheads stopped at 16 milliampere; redheads at 21 milliampere Difference in pain tolerance: 25% more - Based on the electrical stimulation study MC1R gene share of redheads: About 75–80% - Shows that not all redheads share the same genetic cause

Pivotal Quotes: "There were, er, not as many as they thought." — Tim Harford: Introduction to the neighborhood policing data correction "The whole bill is going up by 2%." — Professor Tony Travers: Explanation of why Wandsworth’s council tax claim is misleading "It will certainly have an effect on trade, and for some countries it might reduce the trade deficits. But ... the US is investing more than it saves domestically." — Thomas Sampson: Why tariffs cannot by themselves remove the US trade deficit

Implications: Listeners should be skeptical of official claims that rely on obscure formulas or selective wording. The episode shows how tariff policy, policing statistics, and council-tax messaging can all be shaped by accounting choices, and why underlying definitions and macroeconomic realities matter.