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Here’s how Trump tariffs were calculated and why experts are raising concerns with the methodology?

As President Donald Trump unveiled sweeping tariffs against America’s trading partners, he repeatedly emphasized that each country’s rate was determined by a reciprocal formula—meant to reflect long-standing trade barriers imposed on US goods.

However, the methodology behind the calculations remained unclear until a later clarification by the White House and independent analysis by experts.

The methodology behind Trump’s reciprocal tariffs

Trump’s administration formulated the new tariff rates by taking the US trade deficit with each country and dividing it by the total exports that country sent to the US.

To soften the impact, the final tariff number was then halved.

Deutsche Bank confirmed this approach, noting that the larger a country’s trade deficit with the US, the higher its tariff rate under the new system.

The White House later published an explanation of its formula on the US Trade Representative’s website.

“While individually computing the trade deficit effects of tens of thousands of tariff, regulatory, tax and other policies in each country is complex, if not impossible, their combined effects can be proxied by computing the tariff level consistent with driving bilateral trade deficits to zero,” the USTR said.

“If trade deficits are persistent because of tariff and non-tariff policies and fundamentals, then the tariff rate consistent with offsetting these policies and fundamentals is reciprocal and fair,’ it added.

While the calculations included mathematical symbols, they ultimately aligned with the trade deficit-based approach previously suspected.

BBC’s Faisal Islam has posted the formula: