The U.S. announced what it described as ‘reciprocal tariffs’ on all nations in April 2025. These ‘reciprocal tariffs’ for each country were based on the trade deficit the U.S. has with each country or, where it does not have a deficit, a standard tariff rate the country imposes on U.S. imports.

Introducing ‘reciprocal tariffs’ at some stage was unsurprising, as the president prioritised changing trade terms and trying to leverage changes in other countries’ tariffs. However, imposing ‘reciprocal tariffs’ that are not solely based on the tariff that countries impose on U.S. imports and basing them on the
trade deficit means that many countries, governments and financial markets were surprised by the extreme nature of some tariffs on key exporters to the U.S.

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