On social media, many viewers were stunned after a man shared an unbelievable theory on how Trump calculated tariff rates, sparking discussion.
A Twitter user has shared an intriguing theory about how Donald Trump calculated the new tariffs on countries.
The president’s ‘Liberation Day’ tariffs, announced on April 2, have sparked reactions, especially after a statement from the Office of the U.S. Trade Representative.
According to this user, Trump’s method for calculating the tariff rates is based on a peculiar formula.
Trump’s ‘Liberation Day’ tariffs shock the world
On April 2, 2025, President Trump announced a new wave of tariffs aimed at boosting the U.S. economy.
In his speech, Trump claimed that the tariffs would reclaim America;s destiny and “Make America Wealthy Again.”
He said: “April 2, 2025, will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to ‘Make America Wealthy Again.”
Additionally, Trump also emphasized that for decades, the U.S. had been “looted, pillaged, raped, and plundered” by other nations.
Tariff rates explained by the Office of the U.S. Trade Representative
The Office of the U.S. Trade Representative released a statement outlining the methodology behind the tariff calculations.
The explanation described how the tariffs were based on balancing bilateral trade deficits.
According to this method, the tariff rate is calculated by dividing a country’s trade surplus with the U.S. by its total exports, using data from the U.S. Census Bureau for 2024.
The result is then divided by two to produce the final rate.
A man on X revealed how Trump calculated the tariff rates
On X platform, James Surowiecki challenges the official tariff calculation method.
James Surowiecki, a Twitter user and financial expert, disagreed with the official explanation. Surowiecki criticized the tariff rates, arguing that the numbers were fabricated. He pointed out that South Korea, with which the U.S. has a trade agreement, is not charging a 50% tariff on U.S. exports, nor is the EU charging a 39% tariff.
He wrote 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.
“So we have a $17.9 billion trade deficit with Indonesia. Its exports to us are $28 billion. $17.9/$28 = 64%, which Trump claims is the tariff rate Indonesia charges us. What extraordinary nonsense this is.”
Surowiecki went on to offer his own analysis of the tariffs.
He explained that the U.S. Trade Representative didn’t use actual tariff rates or non-tariff barriers.
Instead, they simply took the U.S. trade deficit with each country and divided it by that country’s exports to the U.S.
For example, the U.S. has a $17.9 billion trade deficit with Indonesia, which exports $28 billion worth of goods. This results in a 64% tariff, according to Trump’s method.
Surowiecki labels the tariff method as ‘extraordinary nonsense’
Surowiecki described this approach as “extraordinary nonsense.” He further criticized the method as deceptive, noting that it ignored the U.S. trade surplus in services.
He wrote: “This tweet is correct, but it’s actually worse than I thought: in calculating the tariff rate, Trump’s people only used the trade deficit in goods. So even though we run a trade surplus in services with the world, those exports don’t count as far as Trump is concerned.”
The U.S. runs a trade surplus in services with most countries, but this factor was excluded from the tariff calculation.
In short, Surowiecki’s theory has stirred reactions among other financial experts.
What do you think about Surowiecki’s theory ?