Trump's tariff strategy: Unfounded rates stir global tensions
The Donald Trump administration imposed tariffs on numerous countries. The rates differ. The White House explains it was guided by the tariff levels in individual countries. However, as commentators have noted, it seems a simple formula was decisive, which had nothing to do with customs duties.
What do you need to know?
- The Donald Trump administration imposed tariffs on numerous countries, claiming it wants to "punish" countries that have a trade surplus in relations with the US.
- The White House explains the rate levels with other countries' tariffs. The problem is that the specified amounts are not accurate.
- Everything suggests that Trump's team invented the rates by looking at the trade surplus in relation to the import value.
US President Donald Trump announced tariffs on numerous countries, stating that this approach was intended to protect the American market and producers.
The tariff rates vary. For example, China will face a rate of 34%, the European Union 20%, Japan 23%, and India 26%. The hardest hit were Cambodia (49%) and the Territorial Collectivity of Saint Pierre and Miquelon (50%).
Trump's formula
The Trump administration argues its decisions by saying that all these countries impose tariffs on American goods. The issue is that the rates, according to the White House, imposed by these countries do not reflect reality. For instance, according to Trump, EU tariffs on US products are 39%, which is just not true.
So what is the logic of the Americans? As journalist James Surowiecki notes, everything indicates that the alleged tariff rates that other countries supposedly impose on US goods are simply the quotient of the United States' trade deficit and the import value to the USA from a given country.
For example, the US trade deficit with the EU in 2024 is over 235 billion dollars. Americans imported goods worth over 856 billion CAD from EU countries. The surplus thus constitutes over 38% of the import, which is almost the 39% declared by the White House.
However, Americans also imposed rates on countries with which they have a trade surplus, like Australia. These countries were "hit" with 10% rates.
James Surowiecki criticized the approach taken by the Trump administration, expressing disbelief that they would calculate a supposed tariff rate by dividing the trade deficit by imports and then set actual tariffs by arbitrarily halving that figure—a method he regarded as both nonsensical and intentionally misleading.
