U.S. President Donald Trump speaks during an event announcing new tariffs in the Rose Garden at the White House in Washington, April 2, 2025.
Chip Somodevilla | Getty Images
President Donald Trump announced an aggressive, far-reaching “reciprocal” tariff policy Wednesday, leaving many economists and U.S. trade partners to question how the White House calculated its rates.
Trump’s plan established a 10% baseline tariff on almost every country, though many nations such as China, Vietnam and Taiwan are subject to much steeper rates. At a ceremony in the Rose Garden on Wednesday, Trump held up a poster board that outlined the tariffs the administration contends are “charged” to the U.S., as well as the “discounted” tariffs the U.S. would implement in response.
Those reciprocal tariffs are mostly about half of what the Trump administration said each country has charged the U.S. For example, the poster said China charges a tariff of 67% and that the U.S. will implement a 34% reciprocal tariff in response.
However, a report from the Cato Institute said the trade-weighted average tariff rates in most countries are much lower than the Trump administration said. The report is based on trade-weighted average duty rates from the World Trade Organization in 2023, the most recent year available.
The Cato Institute said the 2023 trade-weighted average tariff rate from China was 3%, not the 67% the administration said it was.
The administration said the European Union charges the U.S. a tariff of 39%, but the Cato report said the EU’s 2023 trade-weighted average tariff rate was 2.7%.
In another example, the administration said India imposes a 52% tariff on the U.S., but Cato found that India’s 2023 trade-weighted average tariff rate was 12%.
Many users on social media this week were quick to notice that the Trump administration appeared to have calculated by dividing the trade deficit by imports from a given country to arrive at tariff rates for each one. It’s an unusual approach, as it suggests that the U.S. factored in the trade deficit in goods but ignored trade in services.
The Office of the U.S. Trade Representative, in a news release, said computing the combined effects of tariff, regulatory, tax and other policies in various countries “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 USTR said in the release.
