Trump Administration Used This Formula To Determine "Not Reciprocal" Tariffs

As countries consider their responses to US President Donald Trump's tariffs, reports on how the rates were calculated suggest that they weren't exactly reciprocal.

For over half the countries, a flat reciprocal tariff of 10 per cent was imposed, according to the Wall Street Journal. For other countries, an additional levy was added.

Per CNN, the number was arrived through a simple calculation: take the country's trade deficit with the US, divide it by exports to the US and then multiplying by half to reach the "Discounted Reciprocal Tariffs".

Mike O'Rourke, chief marketing strategist at Jones Trading, said the tariffs are actually policies of surplus targeting. "There does not appear to have been any tariffs used in the calculation of the rate. The Trump administration is specifically targeting nations with large trade surpluses with the United States relative to their exports to the United States," he wrote in a note to investors accessed by CNN.

Trump reserved some of the highest tariffs for what he called "nations that treat us badly". That included an additional 34 per cent on goods from China -- bringing the new added tariff rate there to 54 per cent. The figure for the European Union was 20 per cent, and 24 per cent on Japan.

The US revised downwards the import duties to be imposed on India from 27 per cent to 26 per cent, according to a White House document. These duties will come into force from April 9.

The US accounts for about 18 per cent of India's total goods exports, 6.22 per cent in imports, and 10.73 per cent in bilateral trade.

With America, India had a trade surplus (the difference between imports and exports) of $35.32 billion in goods in 2023-24. This was $27.7 billion in 2022-23, $32.85 billion in 2021-22, $22.73 billion in 2020-21, and $17.26 billion in 2019-20.

In 2024, India's main exports to the US included drug formulations and biologicals (U$8.1 billion), telecom instruments ($6.5 billion), precious and semi-precious stones ($5.3 billion), petroleum products ($4.1 billion), gold and other precious metal jewellery ($3.2 billion), ready-made garments of cotton, including accessories ($2.8 billion), and products of iron and steel ($2.7 billion).

Imports included crude oil ($4.5 billion), petroleum products ($3.6 billion), coal, coke ($3.4 billion), cut and polished diamonds ($2.6 billion), electric machinery ($1.4 billion), aircraft, spacecraft and parts ($1.3 billion), and gold ($1.3 billion).