Trump’s Tariff Formula: Internet Thinks It Has Cracked The Code, Points To US Trade Deficits

Last Updated:April 03, 2025, 13:53 IST

Trump announced 10% tariffs on all imports into the United States, and even higher tariffs on goods from about 60 countries or trading blocs that have a high trade deficit with the US

White House trade adviser Peter Navarro has suggested the new tariffs would raise USD 600 billion annually, which would be the largest tax increase since World War II. (Photo: AFP)

A day after US President Donald Trump’s “Liberation Day", high-ranking officials of affected nations are busy doing calculations. But what caught people’s eyes was numbers mentioned on a plaque that Trump held in his hands while announcing reciprocal tariffs.

While making the announcement, Trump said: “For nations that treat us badly, we will calculate the combined rate of all their tariffs, non-monetary barriers and other forms of cheating."

The numbers, he said, are “approximately half of what they are and have been charging us."

Using national emergency powers, Trump announced 10% tariffs on all imports into the United States, and even higher tariffs on goods from about 60 countries or trading blocs that have a high trade deficit with the US. That includes China and the European Union, which will be levied new duties of 34% and 20%, respectively.

Internet Cracks The Math Behind Trump’s Tariffs

Julian Klymochko, CEO and CIO of Investment firm Accelerate FT, referred to Trump’s move as “biggest economic blunder of all time". In a post on X, he said the “tariffs charged to the USA" are not tariffs at all but they are the US trade deficit divided by US imports from that country.  He said to set a level of “reciprocal" tariffs based on completely incoherent non-tariff calculations is “incomprehensible".

Ryan Petersen, Founder and CEO of Flexport, also backed trade deficit theory and posted a chart showing the predictions of this formula plotted against the actual new tariff rates.

Another netizen, Brian Krassenstein said this is the stupidest thing he has ever seen.

How Much New Tariffs Would Help US

White House trade adviser Peter Navarro has suggested the new tariffs would raise USD 600 billion annually, which would be the largest tax increase since World War II. Treasury Secretary Scott Bessent told lawmakers the tariffs would be capped and could be negotiated downward by other countries, according to the office of Rep. Kevin Hern, R-Okla.

Washington D.C., United States of America (USA)

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