Economics

Summary

Trump’s new tariffs use a formula based on bilateral trade deficits, not actual tariff reciprocity. The White House divides the U.S. goods deficit with a country by total imports from that country, then halves the result.

For China, a $295B deficit on $440B in imports yields a 34% tariff.

Over 100 countries face tariffs, even some without U.S. trade deficits, like the UK.

Economists widely criticized the method as lacking economic rationale. Experts warn the approach may not reduce the overall trade deficit and could harm global growth.