U.S. President Donald Trump on April 2 announced plans to impose reciprocal tariffs on imports, based on the duties foreign nations levy on American goods. However, he did not disclose a specific formula for the calculations.
Trump said the U.S. would impose tariffs amounting to “half of what each country charges us.” But one figure he cited—claiming South Korea imposes a 50% tariff on U.S. goods—was inaccurate.
Following his remarks, speculation spread on social media, including on X, that the White House had derived its tariff rates using a controversial method: dividing the U.S. trade deficit with a country by the total value of imports from that country. Under this formula, tariff rates would fluctuate depending on the size of the trade deficit.
During a Rose Garden briefing, Trump held up a chart listing purported tariff rates for various countries, showing South Korea at 50%. The White House said the figures factored in import duties, subsidies, and non-tariff barriers such as currency policies but did not provide a detailed breakdown of the methodology.
Trade experts quickly questioned the figures. Analysts noted that the numbers appeared to reflect the U.S. trade deficit as a proportion of total imports from each country. According to U.S. Census Bureau data, the U.S. recorded a $65.5 billion trade deficit with South Korea in 2024, with total imports from the country reaching $131.5 billion—a ratio of approximately 49.8%.
A similar pattern emerged for other countries listed in Trump’s chart. The U.S. ran a $235 billion trade deficit with the European Union last year, importing $605 billion worth of goods. The resulting ratio of 38.8% closely matched the 39% tariff rate Trump attributed to the EU. The same formula applied to China (67%), Japan (46%), and Vietnam (90%), as well as the Philippines (34%), Israel (33%), and India (52%).
James Surowiecki, a columnist for The Atlantic and The New Yorker, criticized the White House’s figures, writing on X: “Just figured out where these fake tariff rates come from. They didn’t actually calculate tariff rates + non-tariff barriers, as they say they did. Instead, for every country, they just took our trade deficit with that country and divided it by the country’s exports to us.”
Specifically addressing South Korea, he wrote, “South Korea, with which we have a trade agreement, is not charging a 50% tariff on U.S. exports. Nor is the EU charging a 39% tariff.”
South Korea’s Ministry of Trade, Industry and Energy said that under the U.S.-Korea Free Trade Agreement (KORUS FTA), most goods traded between the two nations are tariff-free. The average tariff imposed by South Korea on U.S. imports was 0.79% in 2024, far below the White House’s claims. However, a senior Trump administration official insisted South Korea’s tariff rate was 13%, compared to the U.S. most-favored-nation (MFN) rate of 3.5%—a claim that contradicts available trade data.
Amid mounting criticism, White House Press Secretary Caroline Leavitt shared a tariff calculation formula from the U.S. Trade Representative (USTR) on X, though it did little to quell concerns.
A senior U.S. official told reporters that the Council of Economic Advisers (CEA) had used a “well-established” methodology to derive the figures. “The model is based on the idea that a country’s trade deficit with the U.S. reflects the cumulative impact of unfair trade practices,” the official said.
Meanwhile, Treasury Secretary Scott Bessent, speaking to Fox News, warned countries against retaliating against the new tariffs. “My advice to every country right now is: do not retaliate. Sit back, take it in, let’s see how it goes. Because if you retaliate, there will be escalation,” he said. “If you don’t retaliate, this is the high-water mark.”
