No, that’s not what a trade deficit means – and that’s not how you calculate other nations’ tariffs

Photo credit: Greg Goebel via Flickr. CC BY-SA 2.0. Article by Peter Draper and Vutha Hing. The Conversation – April 4, 2025.

On April 2, United States President Donald Trump unveiled a sweeping new “reciprocal tariff” regime he says will level the playing field in global trade – by treating other countries the way (he claims) they treat the US. First, Trump’s plan will impose a “baseline” 10% tariff on virtually all goods imported into the US, effective April 5. Then, from April 9, 57 countries will face higher “reciprocal tariffs”. These vary by country, according to a formula based on individual trade deficits. On face value, the new tariff regime might sound like a simple solution for fairness. If a particular country was taxing American imports with a 50% tariff, it might seem fair for the US to tax their imports at 50% as well. But appearances are deceiving. […]

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