Trump's newly announced “reciprocal tariffs” appear to be based on a formula that relies on the trade imbalance between the US and its partners, rather than any real-world tariffs or duties imposed by other nations.

The method divides the US goods trade deficit with a country by total imports from that country, with his administration claiming to factor in “non-tariff barriers and currency practices”.

Critics argue this approach is flawed because it focuses on trade deficits rather than actual tariff differences, which distorts the real trade picture.

The Office of the US Trade Representative, the president’s official trade administration, admitted as much in an explanation on their website.

“To conceptualise reciprocal tariffs, the rates that would drive bilateral trade deficits to zero were computed,” it said.

In 2024, exports to the US amounted to $9.9 billion, while US imports totalled just $264 million, leaving a trade deficit of $9.64 billion.

The formula used was: (Trade Deficit / Exports to the U.S.) × 100 = The “tariff” rates claimed by the Trump administration.

So, 9.64/9.9 = 0.97. Multiply this by 100 to arrive at a percentage, and we see how the Trump team calculated the figure of 97%.

The president claimed that the “niceness” of the American people led him to half the percentage.

Despite the fact that the claimed 97 per cent figure does not represent the average customs duty rate that Cambodia imposes on US imports, the new tariffs will enter force very soon if no negotiations take place. They are likely to affect trade with the US, Cambodia’s largest export market.