Trump’s ‘Reciprocal’ Tariff Formula Is All About Trade Deficits

President Donald Trump’s administration calculated its raft of new tariffs primarily based on existing trade balances — a departure from pledges to match the tariff rates and other trade barriers from other countries.

In a statement published Wednesday night to explain its methodology for tariffs that rocked the globe, the United States Trade Representative detailed a formula that divides a country’s trade surplus with the US by its total exports, based on data from the US Census Bureau for 2024. And then that number was divided by two, producing the “discounted” rate.

China, for instance, had a trade surplus ...