WASHINGTON - US President Donald Trump’s administration calculated its raft of new tariffs primarily based on existing trade balances – a departure from pledges to match the tariff rates and other trade barriers from other countries.

In a statement published on the night of April 2 to explain its methodology for tariffs that rocked the globe, the United States Trade Representative (USTR) detailed a formula that divides a country’s trade surplus with the US by its total exports, based on data from the US Census Bureau for 2024. And then that number was divided by two, producing the “discounted” rate.

China, for instance, had a trade surplus of US$295 billion (S$396.1 billion) with the US in 2024 on total exports of US$438 billion – a ratio of 68 per cent.

Divided by two according to Mr Trump’s formula, that yielded a tariff rate of 34 per cent. The same calculations roughly produced the rates for other economies like Japan, South Korea and the European Union.

Countries where the US runs a trade surplus were also hit, facing a flat 10 per cent rate regardless, as did nations where trade was roughly even. 

The USTR statement said that while it was technically possible to calculate rates for actual barriers, this methodology would achieve Mr Trump’s goal of driving down trade deficits.

“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,” said the statement, which was unsigned.

Mr Trump unveiled a range of tariffs in the Rose Garden on April 2 by flipping around a placard with a series of rates based on “tariffs charged to the USA” and, at half the rate, the “discounted reciprocal tariff”. 

The method for calculating the tariffs had been largely unknown in the run-up to Mr Trump’s announcement. Adding to the confusion, the rates released by Mr Trump differed slightly from those in the annex accompanying Mr Trump’s executive order. South Korea, for instance, was listed at 25 per cent on Mr Trump’s board and 26 per cent in the annex.