Let’s review Trump’s definition of reciprocal tariffs and his new announcements.
Fact Sheet Announcement
Please consider the White House Fact Sheet: President Donald J. Trump Continues Enforcement of Reciprocal Tariffs and Announces New Tariff Rates
Today, President Donald J. Trump signed an Executive Order determining that certain tariff rates, which were initially set to expire on July 9, will expire on August 1, 2025. President Trump also sent tariff letters to many countries informing them of their new reciprocal tariff rates, which will take effect on August 1.
The countries in the lead chart, excluding Vietnam, are countries that received letters.
Reciprocal Tariff Formula
Tariff Percent = ((Imports – Exports) / Imports) * 50
or Tariff Percent = (Net Imports / Imports) * 50
There are other variables, but they all cancel out, producing the above.
Trump “We charge them what they charge us.”
One can easily see that this has nothing to do with counter tariffs at all. But that’s the formula.
There is one more proviso and that is a minimum tariff of 10 percent.
Exports and Imports on Tariff Lettered Countries
To add further perspective to the above chart, 2024 imports from Mexico were $506 billion and exports to Mexico were $334 billion.
Trump is threatening Bosnia and Herzegovina with 30 percent tariffs because of $0.1 billion in net imports.
UK Reciprocal Tariffs
The US has a trade surplus with the UK. This results in some interesting math.
US Exports to the UK: 33 Billion
US Imports from the UK: 23 Billion
((23-33)/23) * 50 = -21.74 Percent
Hmm. It seems we should be paying the UK 21.74 percent on our imports.
Trump got around this by applying a minimum 10 percent tariff.
Myanmar Reciprocal Tariffs
The Census Department does not have downloadable data for Myanmar, so it’s not in my chart.
But I do see this from AI: The U.S. has implemented sanctions and export restrictions targeting Myanmar’s military and related entities following the 2021 coup. The U.S. suspended the 2013 Trade and Investment Framework Agreement (TIFA) with Myanmar following the coup.
Interesting Fact: Despite the sanctions, some trade continues. In April 2025, top imports from Myanmar to the US included Trunks and Cases, Broadcasting Equipment, and Felt or Coated Fabric Garments.
According to the U.S. Trade Representative, total goods trade was $734 million, with exports at $77 million and imports at $656.5 million.
Running through the math, I arrive at reciprocal tariffs of 44.13 percent.
Vietnam
Vietnam worked out a 20 percent deal although the reciprocal calculation suggests 45 percent.
The deal is predicated on Vietnam not allowing China to reroute goods from China through Vietnam.
Exports transshipped through Vietnam to the US will face 40 percent tariffs.
Let’s see how long Trump is happy with this arrangement.
50 Percent Tariffs on Brazil
Yesterday I noted Trump Slaps Brazil With a 50 Percent Tariff Over Treatment of Political Ally
The tariff Bizarro World gets more bizarre.
The announcement was due to a feud Trump has with the current Brazilian president over the former Brazilian president, a Trump ally.
But Trump’s Letter to Brazil posted on Truth Social also moans about trade imbalances.
Starting August 1, 2025, we will charge Brazil a tariff of 50% on any ana all Brazilian products sent into the United States … Please understand that the 50% number is far less than what is needed to have a level playing field with your country.
Trump copied his nonsensical rant from his other tariff letters without thinking, or perhaps even knowing, the US has a trade surplus with Brazil for 17 straight years.
I crunched the reciprocal tariffs according to Trump’s formula and the tariff rate on Brazil should be ((42-50)/42)*50 = -9.5 percent.
We owe Brazil money.
Good Proposals Coming In
On May 18, Bessent said Countries bringing ‘good proposals’ with ‘a few exceptions’
“I can tell you that, with a few exceptions, the countries are coming with very good proposals for us,” Bessent told CNN’s Jake Tapper. “They want to lower their tariffs; they want to lower their nontariff barriers.”
The deals were so good, Trump accepted two of them, the UK and Vietnam. The US has a trade surplus with the UK.
US Balance of Trade Goods Only
I am sure glad we going after Bosnia and Herzegovina, Myanmar, and Tunisia.
Unfortunately, a quick check shows Vietnam is not making the expected progress. So don’t expect Trump to honor his deal with Vietnam for long.
At the current rate, the balance of trade with Vietnam for 2025 will be -150 billion vs -123 billion for 2024.
Weight Loss Drugs Blow Out the Ireland Trade Deficit
For discussion of the above chart and what’s going on with Ireland, please see Weight Loss Drugs Help Blow Out the US Trade Deficit
The US trade deficit with Ireland for all of 2024 was $87 billion. For the four months through April, the deficit is already $65 billion.
That’s second to China at $88 billion.
Drugs are in play.
Note that Movies Are Now a National Security Threat, 100 Percent Tariffs Announced
Hooray for Hollywood!
Yes, it’s really this stupid.
On June 16, I commented After Trump Threatened Apple, His Sons Announce a Made-in-America Phone
Trump Mobile and a $499 “Glued-in-America” phone is coming in August.
The parts for the alleged “Made-in-America” T-Phone are almost entirely from Asia. Even Glued-In-America is highly unlikely, and certainly not for $499 if there is any semblance of quality.
Unlike phones, pharmaceuticals could easily be made in the US. The reason they aren’t is tax code.
A simple fix would set the tax code in the US at a lower rate than tax code overseas. Investment would return to the US in a hurry.
Copper Spikes to Record High After Trump’s 50 Percent Tariff Announcement
Yesterday, I noted Copper Spikes to Record High After Trump’s 50 Percent Tariff Announcement
It’s 200 percent on pharmaceuticals with a grace period.
This is seriously stupid stuff. The US imports about 50 percent of its copper needs.
Perhaps mining industry employment doubles, if and when US mines get into production. Color me extremely skeptical.
Regardless, any increase in mining employment will be dwarfed by users of copper, all paying a higher price.
- Building Construction:This sector accounts for the largest share of copper consumption in the US, with around 45% of the total, according to Statista.
- Electrical and Electronic Products: This sector uses around 22% of the copper consumed in the US, according to Statista.
- Transportation: Copper is also used in transportation equipment, although the exact percentage varies year to year.
- Other uses: Copper is also used in consumer and general products, as well as industrial machinery and equipment.
Far more likely than increasing mining capacity, US producers will raise prices to take advantage of the tariffs.
Tens-of-millions of consumers and businesses lose. A few thousand mining executives and employees gain (assuming the overall slowdown does not make everyone a loser).
This is “The art of the government-mandated deal”.
Please let that phrase sink in.
Why is it that services do not count?
The US has significant export surplus with most countries, and in many cases significant enough to turn trade deficits into surpluses or seriously dent the deficit.
Countries may well retaliate with respect to those services, which are technically not retaliation since the Donald is only looking at goods. That would have the remarkable effect of trying to onshore low value-added manufacturing but increasing costs to high value-added production and stifling high value-added services.
Why even bother to think or reason about any of this?
Canada here. Because it doesn’t fit his narrative and why let a few facts stand in the way of front running the markets. Other than oil and gas, the US has had a trade surplus with Canada since 2007. In our mid size Ontario city our two biggest private sector employers and our three largest retailers are American, my car is imported from the US, my latest purchase(snowblower) is made in the US, not to mention the dominance of Google and Microsoft in things IT. But no, we cannot speak of these as Trump has the microphone and a substantial number of constituents who are prepared to believe whatever their President tells them, hook line and sinker. I do look forward to the day that this passes as well as the acrimony generated by Trump’s tongue.
How do we know trump is lying we no longer care…cafe Americain.
Adding to Trumps other stupid politician tricks:
Our Pedophile President Trump (PPT) has overseen the oil and gas drilling rig count falling for the10th week in a row!
“Drill Baby Drill” was just more bullshit and the rig count stands 46 rigs below last year.
Exports of LNG have fallen 14% and multiple cargoes have been rejected upon arrival…
Can trump do anything that is even close to reasonable?
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The Dow might descent from 45,000 feet in the second half of July, not bc tariffs, but due to disappointing Mag 7 earnings reports.
Trump is an arsonist that is also the insurance inspector and fire chief and 911 dispatcher.
Something that I do not understand is why the Trump administration and many commentators are stating tariffs are not inflationary. How can we know if major changes imparted on the economy take 12 to 18 months for effect. At least a delay was what we were to expect when I was younger per the economic gurus of the time. The tariffs are going to cause increased prices for the tariffed products, or they will cause reduced supply, or most likely some combination of both. One could imagine, should the supply contract more than prices escalate the overall force would be deflationary. Time will tell if something else is not thrown into the mix to gum up the works even more.
If the tariffs are going to cause inflation, it’s not going to take anywhere near 12-18 months to show up in the data.
The copper tariffs, for example, will be nearly immediately inflationary, given how widely used copper is across all sorts of industries.
The money supply will not inflate.
All tariff revenue goes to the Treasury, decreasing the deficit fiscal spending.
There will be price increases, but they will stifle economic activity (deflationary) in certain applications.
Bring in Beerboch from Germany to turn this thing around 360 degrees.
If you think these tariffs are dumb, wait until the 500% “secondary tariffs” that Lindsay Graham wants are enacted. 500% tariffs on India and China because they’re buying Russian oil. I guess we’ll put a 500% tariff on ourselves because we buy uranium from Russia. The Dotard is following the South Carolinian midget Nancy boy off a cliff.
If this tariff stuff doesn’t go away, then the US is headed into a black market economy.
When governments become an obstacle, the people go around ’em.
The millennials and Gen Z would take to it, like a duck to water.
“When governments become an obstacle…” is a very mild way to characterize it. The govt is coercively preventing Americans’ efforts to make mutually beneficial exchanges, rather than safeguarding citizens’ persons and property as is its intended purpose. What the govt is doing is immoral. Morality will be on the side of the black marketeers.
high tariffs in years past created the smuggling industry. buy properties on secret coves.
The one thing I don’t understand about Trump’s tariff war with the world is why he’s imposing tariffs on the 111 conutries we have a trade surplus with.
If his premise is to fix the trade imbalance, he shouldn’t be raising tariffs on any nations that we have a trade surplus with.
He also imposed 50% tariffs the other day on copper imports.
This is going to hit Chile the hardest given we get 70% of our refined copper imports from Chile.
Chile also happens to be one of the nations we have a trade surplus with.
I understand his premise of wanting to protect American manufacturers, but his tariff war is haphazard at best.
He said on April 22 that he had 200 trade deals sitting on his desk and that he’d be done with his self-imposed tariff war in 3-4 weeks.
Of course he’s been full of crap every time he’s spoken about his tariff war with the world.
90 days passed just the other day as well and so far, he hasn’t inked a single new trade deal with any nation despite his lies to the contrary.
Trade deals often take over year to negotiate, sign and put into effect.
I still think it’s going to take a lot longer until the dust settles and new trade deals actually come to fruition.
Imposing 50% tariffs on copper from Chile is just his latest nonsensical move in trying to gain the upper hand.
“I understand his premise of wanting to protect American manufacturers, but his tariff war is haphazard at best.”
I can’t disagree with the haphazard part. It all could be thought out & implemented a lot better than he’s doing.
There’s a large mine project in AZ that’s been held up in the courts for about 10 years. If he’s able to push up prices high enough, I’d imagine there’s going to be enormous pressure to get this project moving. Whether or not that happens or not is hard to say. My guess is that Trump’s tariffs won’t be able to outlast the courts.
But, having us move closer to producing all the copper we need is a good thing, assuming it can be done economically. It fits in with his overall trade / tariff plans, but we can agree it’s not being implemented in a well thought out manner, IMHO.
Good observations. I believe Trump’s primary objective is not what he blusters about, rather, without passing judgement, I believe he thinks he can rearrange the revenue side of the federal budget to be primarily via tariffs (note his 10% minimum tariff rate) and fees (he is jacking around with some small potatoes in this area via messing with national park fees) so he can jettison the income tax and or supplement with some form of national sales tax. I believe it was Lutnick that blurted out essentially that scenario, but with the push back has since not too vociferous on the topic. Trump has said in the past he was very much an admirer of President McKinley, who he said at the same time raised tariffs (Trump’s history, not mine). McKinley also signed legislation creating the fed. Trump is all about Trump being in the spotlight continuously and creating an enduring legacy. If he can create a legacy by doing well for the country all the better, but the primary driver is to reward Trump and keep the spotlight on him long after his presidency.
Don’t pay attention to what Trump says, but to what he does.
JP will cut rates in Q3/Q4 2025 and next year. The “reserve based money creation” era might be over. Trump is cutting regulations and sectors which cost a lot, but prohibit growth, instead of raising taxes. He supports a strong dollar and a strong military. He busted Iran’s nukes. China has 1500 acres of underground command and control complex near Beijing and 350 underground facilities for ballistic missiles which can reach the US. The GBU-57/B isn’t good enough. A new bomb, 22,000 pounds instead of 30,000 pounds, which can fit a B-21, which replaces the B-2, a smarter bomb that can dribble from a long distance and cause a greater damage ==> instead nukes. China provides the Hoothies satellite views
to sink ships.
I believe TACO wants a weak dollar that is the case today. I can tell you for a fact after listening to a number of company/consultant presentations, most companies don’t know how to plan as the rules of the game are ever changing. The only item that has remained consistent is that trump focuses on the potential of tariff revenues, showing little concern as to whom will ultimately pay them. Thus far, the majority of companies have been eating them but this will change.
“He supports a strong dollar”. What??
Trump and his cronies want a weaker dollar.
The Houthis never did anything to me. I like the Houthis. Go Houthis!
A drone attack launched near u might destroy your town, as the Mossad did in Iran. Trump wants to beef up our defense and attack capabilities
(Boeing B-21) to prevent a war, not to start a war.
That’s plain weird.
If the Dow plunge the dollar will rise. If debt rolls back investors will park their money in a country that reduced its debt and with rising SPX (not in 2025). Trump wants to foil a BRICS currency which will deflate the US dollar.
If only there were a “World Trade Organization” that could regulate international trade and tariffs.
“Now is the winter of our discontent/Made glorious summer by this son of New York”
“…So don’t expect Trump to honor his deal with Vietnam <Insert any country here> for long.”
This uncertainty seems like it’s intentional. I am guessing all fund manager are buying when Tariff threats are mentioned by the republican administration, and selling when Tariff deals are mentioned.
I am waiting for Apple to pass on to the consumer the savings they made by producing in China. Will I have to wait long?
How much are you willing to pay for an apple phone produced 100% in the US?
I dislike Apple and never bought their products. I always find them too expensive for what they give. They are for the fashion conscious.
Myanmar is transhipping from China so it was hit with the big tariffs. Myanmar does not produce broadcasting equipment domestically.
We have almost zero trade with Myanmar. Not used to avoid anything
Is it really worth replying to something he literally made up?
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Look up what it makes and then come back to me. If you you don’t then you are a buffoon.
Then answer Mish’s reply so you won’t be a ‘buffoon’ either. What exactly are we trading with Myanmar? How much? And how will this tariff promote US interests?
They’re not even worth color revolutionizing, but we’re doing it anyway. At this point, it’s just instinct.
Centrally planned USA economy FTW
Have Trump, Bondi, Kash and Bongino suggested tariffs on sick pedos?
Have you suggested to the mirror being a serious human being?
The American & Israeli flags are the new de facto Pedo Pride flags.
Perhaps it’s the presidential seal that should be used to signify pedo’s in America?
I’m kinda partial to our nations flag as representing good things. Let’s not ruin that too!
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Had no idea the US even traded with those little countries.
I’d expect to see some of them on a USAid list, actually.
They probably are