US President Donald Trump will speak during an event on April 2, 2025, when he announced new tariffs at Rose Garden in Washington’s White House.
Chip somodevilla | Getty Images
President Donald Trump announced an offensive and widespread “mutual” tariff policy on Wednesday, causing many economists and US trading partners to question how the White House calculated its fees.
Trump’s plan has established a 10% baseline tariff for almost every country, but many countries such as China, Vietnam and Taiwan are subject to very sudden charges. At a ceremony at Rose Garden on Wednesday, Trump held a poster committee outlining the administration’s “accused” tariffs and the “discount” tariffs that the administration will implement accordingly.
These mutual tariffs are about half of what the Trump administration has said countries have charged the US. For example, the poster said China will charge 67% tariffs and the US will implement 34% mutual tariffs.
But the Kato Institute reported that trade-weighted average tariff rates in most countries are far lower than the Trump administration said. This report is based on the 2023 trade-weighted average obligation rate from the World Trade Organization.
The Kato Institute said the 2023 trade-weighted average tariff rate from China was 3%, not the 67% the administration said.
The administration said the European Union has charged the US with a 39% tariff, but the CATO report said the EU’s 2023 trade-weighted average tariff rate was 2.7%.
In another example, the administration said India is leviing a 52% tariff on the US, but Kato found India’s 2023 trade-weighted average tariff rate was 12%.
Many users of social media this week quickly realized that the Trump administration appears to have been calculated by splitting the trade deficit by imports from certain countries, reaching their respective tariff charges. That’s an unusual approach as the US has considered the trade deficit in goods but suggests it ignored the trade in services.
In a news release, the US Trade Representative said that calculating the combined effects of tariffs, regulations, taxes and other policies in various countries can be axed “by calculating tariff levels consistent with driving the bilateral trade deficit to zero.”
“If the trade deficit is permanent due to tariff and non-tariff policies and foundations, tariff rates consistent with offsetting these policies and foundations are mutual and fair,” the USTR said in the release.
