The Trump administration on Wednesday released its long-awaited formula for calculating the new reciprocal tariffs unveiled in the Rose Garden, offering a clearer picture of how the United States intends to address persistent trade imbalances.
According to a statement from the Office of the United States Trade Representative (USTR), the tariffs are calculated using a straightforward formula based on each country’s goods trade surplus with the United States. Specifically, the method divides a country’s trade surplus by its total exports to the U.S., then applies a 50 percent discount to the resulting percentage.
For example, China exported $438 billion in goods to the U.S. in 2024 and ran a trade surplus of $295 billion, according to Census Bureau data. That yields a surplus ratio of
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