When President Donald Trump announced his controversial tariff in almost every trading partner in the world, he repeatedly called them “reciprocity” – a response, he said, to countries that had hit the US at tariffs and injured the American economy.
But Trump’s claim is misleading not only because some nations hit with the tariff not to collect anything against the US, but also because of mathematics that seems to be used by administration to increase the tariff not survive, according to some economists.
The list of white building rates issued on each location includes different rates. In announcing the tariff at Rose Garden on Wednesday, Trump claimed the number was calculated based on “the combined level of all their tariffs, non-monetary barriers and other forms of fraud.” Trump added that he was “kind,” and divided the number into two and called it “discount.”
President Donald Trump gave a tariff statement at Rose Garden at the White House in Washington, DC, April 2, 2025.
Carlos Barria/Reuters
Calculations for almost all tariffs are determined by dividing the trade deficit of each country with the value of imports, according to the analysis of economists. The number was then divided into two for Trump’s “discount” for the percentage of the final tariff, experts said.
“Before yesterday, 99% of trade economists had never seen a formula like this before,” Oren Ziv, assistant professor of economics at Michigan State University, told ABC News on Friday.
Some economists and journalists condemned the formula immediately after the speech, including James Surowecki, a journalist and financial news writer, who explained it Post on x.
“So we have a trade deficit of $ 17.9 billion with Indonesia. The export to us is $ 28 billion. $ 17.9/$ 28 = 64%, which Trump claims is the level of Indonesia’s tariff to collect us. This extraordinary chaos,” he said in his position.
The White House later emit Explanation of the calculation that says using trade deficits and import numbers.
“This calculation assumes that a persistent trade deficit is caused by a combination of tariffs and non-tariff factors that prevent trade in balance. Tariffs work through direct reduction of imports,” the White House said in a statement.
A container ship left the Newark port for the Atlantic Ocean on April 3, 2025, in New York City.
Spencer platt/getty image
Director of the National Economic Council Kevin Hassett told Fox News on Thursday regarding administrative thinking behind their policies.
“So what happens is that US trade representatives see where the trade deficit is located and adjusts the tariff to respond to the national emergency that I think we all agreed,” he said.
Ziv said this logic was not in accordance with the modern definition of trade deficits.
“When the economist studied the lack of trade, they did not find evidence for this reason,” he said.
ZIV noted that the trade deficit was partially determined by the financial markets, not only demand for imports and manufacturing.
Ziv said the formula was impossible to produce the results sought by administration.
“Since World War II, most industrial countries have followed a set of consistent trade policy rules. Basically, they know that the trade war does not help anyone,” he said.