Donald Trump, using a large chart as a prop in the White House Rose Garden, suggested that his new tariff proposal was straightforward: "Reciprocal - that means they do it to us, and we do it to them. Very simple. Can't get any easier than that."

Perhaps a little too simplistic. The approach employed to generate the most crucial numbers in international trade, politics, and economics has astounded some of the world's finest specialists.

For each country, the White House calculated its trade in goods deficit for 2024 and divided it by the total value of imports. To be "kind," Trump promised to grant a discount, so he cut the figure in half. The calculation was even simplified to a formula.

For example, consider the figures for China:

Goods trade deficit: $291.9 billion.

Total goods imports: $438.9 billion.

Those figures divided equals 0.67, or 67%.

And half equals 34%.

For countries with small deficits, the White House used a 10% baseline, ensuring tariffs would be imposed regardless. This was the situation with the United Kingdom, which the US Census Bureau estimates would have a nearly $12 billion surplus in 2024.

For weeks, Washington has been discussing a comprehensive policy exercise to produce statistics based on a combination of tariff and non-tariff trade barriers, as it understood them, including suspected "currency manipulation," local laws, regulations, and taxes such as VAT.

Experts questioned the strategy, stating that including VAT, which is a sales tax paid on both domestically manufactured goods and international imports, was exceedingly unusual.

However, the White House appears to have revealed that it employed a simple approach in making this conclusion.

Reciprocal tariffs are determined as the tariff rate required to balance bilateral trade imbalances between the United States and each of its trading partners. This calculation assumes that chronic trade deficits are caused by a mix of tariff and non-tariff barriers that keep trade from balancing.

There are several issues with this, not the least of which is that it greatly simplifies the causes of trade deficits. A trade deficit occurs when a country buys more than it sells abroad. The United States has been running a deficit since the 1970s. Typically, trade imbalances balance over time as they put downward pressure on a country's currency.

However, as the global reserve currency, the US has been able to run greater trade deficits than other countries.

Another factor is that US goods are too expensive for consumers in developing economies to purchase, which contributes to some of the particularly significant trade imbalances and increased levies for poorer countries.

Adam Tooze, an economic historian at Columbia University in the United States, described "grotesque" policies for Southeast Asian countries, including a 49% Cambodian tariff, 48% for Laos, and 46% for Vietnam.

"This is not because they discriminate harshly against American exports, but because they are economically impoverished. "The US does not produce many goods that are relevant for them to import," he said.

Vietnam, in particular, has become a worldwide supply chain hub for major firms, like Nike, Intel, and Apple.

Lesotho, a tiny southern African country that is one of the poorest in the world, is another unusual example, with a 50% tariff. Diamonds and clothing are among its main exports to the US, demonstrating how important global links for rare minerals are to the US economy, as well as how the US has sought to boost development in African nations in recent years, with policies to encourage manufacturing by companies such as Levi Strauss and Wrangler.

However, with his "America First" agenda, Trump has upended decades of attempts by successive US administrations to impose worldwide economic influence, causing an earthquake in the global economy.

"This is not serious trade policy or grand strategy," Tooze remarked. "The boss hates trade deficits and his team of willing sycophants came up with a formula, however idiotic, that ticked the box."