"ChatGPT Theory: Trump's Tariff Rate Formula Revealed?"

The ChatGPT Theory: Did ChatGPT Come Up with Trump’s Tariff Rate Formula?

There is a wild theory circulating on social media suggesting that US President Donald Trump's recently announced reciprocal tariff plan, imposing a minimum 10% tariff on all countries, may have been derived from an artificial intelligence chatbot.

Shortly after Trump unveiled the tariffs at the White House Rose Garden on April 2, some users claim they were able to replicate the same tariff plan using OpenAI’s ChatGPT with a simple prompt.

"I was able to duplicate it in ChatGPT," NFT collector DCinvestor shared with his 260,000 followers on X following Trump's announcement of reciprocal tariffs on 185 countries on April 2. He also mentioned that the idea had not been formalized anywhere previously and that it was something the chatbot came up with, leading to speculations that the Trump administration might be using ChatGPT for determining trade policy.

However, it's important to note that the similarities between the AI-generated tariff plan and Trump’s plan could simply be coincidental.

DCInvestor's observation arose in response to crypto trader Jordan Fish, also known as Cobie, who asked ChatGPT to provide an easy way to calculate tariffs so that the US would be on an equal footing in terms of trade deficit, setting a minimum of 10%.

ChatGPT response to question on tariff calculations. Source: Cobie

Journal of Public Economics editor Wojtek Kopczuk also experimented with ChatGPT and obtained identical results, stating, "Confirmed, chatgpt... exactly what the dumbest kid in the class would do, without edits."

Author Krishnan Rohit pondered that this scenario "might be the first large-scale application of AI technology to geopolitics," noting that various AI models all provided the same answer regarding imposing tariffs with ease.

Trump's Reciprocal Tariffs Impact on Crypto

Ryan Petersen, the Founder and CEO of supply chain logistics platform Flexport, revealed that his company reverse-engineered the formula used by the Trump administration to formulate the reciprocal tariffs.

"It’s quite simple, they took the trade deficit the US has with each country and divided it by our imports from that country."

A comment from James Surowiecki, an editor at The Yale Review, echoed a similar sentiment, indicating that the calculation involved dividing the US trade deficit with a country by the country's exports to the US.

Trump's reciprocal tariffs, set to take effect on April 5, will impose a 10% levy on all countries, with some nations facing higher rates. China is set to endure a 34% tariff, Japan 24%, and the European Union 20%.

The crypto markets responded negatively to the news, experiencing a 5% dip after the announcement. Bitcoin (BTC) dropped by $5,500 to $82,277 before slightly recovering, as reported by CoinGecko.