The market speculates that Trump's reciprocal tariff calculation formula: trade deficit/total exports to the United States divided by 2
Well-known financial journalist James Surowiecki posted that just figured out where these false tariff rates in the US came from. They don't actually calculate tariff rates + non-tariff barriers as they say. Instead, for each country, they just divide the US trade deficit with that country by that country's exports to the US. So the US has a trade deficit of $17.90 billion with Indonesia, and its exports to the US are $28 billion, $17.90/$28 = 64% (the US imposes a 32% reciprocal tariff on Indonesia), which Trump claims is the tariff rate Indonesia imposes on the US. What a ridiculous thing. Users found that a similar calculation applies to the European Union and Vietnam as well. (Jin Ten)