Donald Trump’s Controversial New Tariff Plan Revealed
The Donald Trump administration has unveiled a controversial new tariff plan, which economists quickly identified as relying on an overly simplistic and potentially impractical formula: trade deficit divided by imports.
The tariff announcement on Wednesday included baseline tariffs on nearly all imports, with significantly increased rates for specific countries. In explaining the rates for particular nations, Trump claimed they reflected “tariffs charged to the U.S. by trading partners,” citing figures of 39% for the EU, 49% for Cambodia, and 10% for the Heard and McDonald Islands (Australian territory), especially for the residents of penguins.
This approach was swiftly criticized economically on social media. However, soon, both X pundits and reporters suggested that the White House must consult AI chatbots rather than economists to determine its trade policy.
Indeed, ChatGPT, Claude, Gemini, and Grok all recommended the same approach as the White House—import trade deficit. We verified this on ChatGPT and arrived at the same results:
Claude went even further, adding an “adjustment factor”—essentially, Trump’s arbitrary choice indicating his 0.5 times in “tolerance.”
Some users asked different chatbots whether this was, in fact, a mess. In one of the most viral interactions, Grok responded that apparently, the White House folks did not actually know how to apply the provided formula from ChatGPT.
“The Trump administration team indeed justified their claim that the actual tariff rates being charged by other countries are reasonable by using a formula to calculate changes in tariffs. This led to false statements about foreign tariffs. The imposition and collection of tariffs by the U.S. are not genuinely based on trade violations, but rather, they are based on trade bonds that are mistakenly believed to be misunderstandings; it is a misunderstanding of the formula and a broader misunderstanding of trade economics.”
That said, AI enthusiasts enjoyed quite a bit of fun amidst the chaos. Tech commentator Rohit Krishnan termed this the “first large-scale application of AI technology in geopolitics,” suggesting that the White House may have merely prompted AI systems to facilitate a quick solution. Others went a step further, stating that the Trump administration had vibe-coded the tariff formula, marking the first instance of “vibe” in human history.
Others referred to it as an episode of “vibe tariffs” and “vibe decision-making.” If you’re not familiar with the reference, you can read all about vibe coding—but it essentially means asking an AI chatbot to do something for you (in this case, coding) without knowing what’s going on, without supervision, and not caring about the consequences. You are just focused on its vibe.
However, for managing vibes, you also need experts; otherwise, you end up with undesirable outcomes, such as this unnecessarily complex and unrealistic equation. Perhaps all they needed was better timely engineering.
