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How did the U.S. arrive at its tariff figures?

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U.S. President Donald Trump speaks during a “Make America Wealthy Again” trade announcement event in the Rose Garden at the White House on April 2, 2025 in Washington, DC.

Chip Somodevilla | Getty Images

Markets have turned their sights on how U.S. President Donald Trump’s administration arrived at the figures behind the sweeping tariffs on U.S. imports declared Wednesday, which sent global financial markets tumbling and sparked concerns worldwide.

Trump and the White House shared a series of charts on social media detailing the tariff rates they say other countries impose on the U.S. Those purported rates include the countries’ “Currency Manipulation and Trade Barriers.”

An adjacent column shows the new U.S. tariff rates on each country, as well as the European Union.

Chart of reciprocal tariffs.

Courtesy: Donald Trump via Truth Social

Those rates are, in most cases, roughly half of what the Trump administration claims each country has “charged” the U.S. CNBC could not independently verify the U.S. administration’s data on these duties.

It didn’t take long for market observers to try and reverse engineer the formula — to confusing results. Many, including journalist and author James Surowiecki, said the U.S. appeared to have divided the trade deficit by imports from a given country to arrive at tariff rates for individual countries.

Such methodology doesn’t necessarily align with the conventional approach to calculate tariffs and would imply the U.S. would have only looked at the trade deficit in goods and ignored trade in services.

For instance, the U.S. claims that China charges a tariff of 67%. The U.S. ran a deficit of $295.4 billion with China in 2024, while imported goods were worth $438.9 billion, according to official data. When you divide $295.4 billion by $438.9 billion, the result is 67%! The same math checks out for Vietnam.

“The formula is about trade imbalances with the U.S. rather than reciprocal tariffs in the sense of tariff level or non-tariff level distortions. This makes it very difficult for Asian, particularly the poorer Asian countries, to meet US demand to reduce tariffs in the short-term as the benchmark is buying more American goods than they export to the U.S., ” according to Trinh Nguyen, senior economist of emerging Asia at Natixis.

“Given that U.S. goods are much more expensive, and the purchasing power is lower for countries targeted with the highest levels of tariffs, such option is not optimal. Vietnam, for example, stands out in having the 4th largest trade surplus with the U.S., and has already lowered tariffs versus the U.S. ahead of tariff announcement without any reprieve,” Nguyen said.

The U.S. also appeared to have applied a 10% levy for regions where it is running a trade surplus.

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The Office of the U.S. Trade Representative laid out its approach on its website, which appeared somewhat similar to what cyber sleuths had already figured out, barring a few differences.

The U.S.T.R. also included estimates for the elasticity of imports to import prices—in other words, how sensitive demand for foreign goods is to prices—and the passthrough of higher tariffs into higher prices of imported goods.

“While individually computing the trade deficit effects of tens of thousands of tariff, regulatory, tax and other policies in each country is complex, if not impossible, their combined effects can be proxied by computing the tariff level consistent with driving bilateral trade deficits to zero. If trade deficits are persistent because of tariff and non-tariff policies and fundamentals, then the tariff rate consistent with offsetting these policies and fundamentals is reciprocal and fair,” the website reads.

This screenshot of the U.S.T.R. webpage shows the methodology and formula that was used in greater detail:

A screenshot from the website of the Office of the United States Trade Representative.

Some analysts acknowledged that the U.S. government’s methodology could give it more wiggle room to reach an agreement.

“All I can say is that the opaqueness surrounding the tariff numbers may add some flexibility in making deals, but it could come at a cost to US credibility,” according to Rob Subbaraman, head of global macro research at Nomura.

 — CNBC’s Kevin Breuninger contributed to this piece.

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China to impose 34% retaliatory tariff on all goods imported from the U.S.

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Chinese and U.S. flags flutter near The Bund, before U.S. trade delegation meet their Chinese counterparts for talks in Shanghai, China July 30, 2019.

Aly Song | Reuters

China’s finance ministry on Friday said it will impose a 34% tariff on all goods imported from the U.S. starting on April 10, following duties imposed by U.S. President Donald Trump’s administration earlier this week.

“China urges the United States to immediately cancel its unilateral tariff measures and resolve trade differences through consultation in an equal, respectful and mutually beneficial manner,” the ministry said, according to a Google translation.

It further criticized Washington’s decision to impose 34% of additional reciprocal levies on China — bringing total U.S. tariffs against the country to 54% — as “inconsistent with international trade rules” and “seriously” undermining Chinese interests, as well as endangering “global economic development and the stability of the production and supply chain,” according to a Google-translated report from Chinese state news outlet Xinhua.

Separately, China also added 11 U.S. firms to the “unreliable entities list” that the Beijing administration says have violated market rules or contractual commitments. China’s ministry of commerce also added 16 U.S. entities to its export control list and said it would implement export controls on seven types of rare-earth related items, including samarium, gadolinium and terbium.

CNBC has reached out to the White House for comment.

Beijing, which also entertained a tenuous trade relationship with Washington under Trump’s first term, had warned that it would take “resolute counter-measures” to safeguard its own interests after the White House disclosed its latest sweeping tariffs on Wednesday.

Other U.S. trading partners had held off from announcing retaliatory tariffs amid hopes of further negotiations, with the European Union nevertheless voicing a readiness to respond.

The mutual U.S.-China levies are set to impact a trade relationship worth $582.4 billion in goods in 2024, according to the Office of the U.S. Trade Representative.

Analysts expect the U.S.’ protectionist trade policies to steer China toward other trading partners and see it implement further stimulus measures in an effort to galvanize the economy. China has been battling a property crisis and weak consumer and business sentiment since the end of the Covid-19 pandemic.

China’s retaliatory tariffs announced Friday exacerbated declines in global markets which had already been thrust into turmoil by fears of inflationary, recessionary and global economic growth risks following the White House’s tariffs.

Mohamed Aly El-Erian, chief economic advisor for Allianz SE. 

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