Tariff war: How US decides who pays more; Trump spells out the 'formula'

US President Donald Trump on Wednesday defended his administration’s new round of steep import tariffs , saying they were calculated using “common sense,” trade deficits, and how the United States had been treated historically by other countries.

In a press briefing, Trump said, “The formula was a formula based on common sense, based on deficits, based on how we've been treated over the years, and based on raw numbers. Brazil, as an example, has been not good to us, not good at all.”

“But they're based on very, very substantial facts and also past history. You look at the past history - we’ve been. We never had anybody in the White House that understood the numbers or were into it like I have,” he added.

This comes as Trump announced new import tariffs targeting several countries - including a 50 per cent duty on Brazil.

Other countries affected include the Philippines, Brunei, Moldova, Algeria, Libya, Iraq, and Sri Lanka, with tariffs ranging between 20 and 30 per cent.

Earlier on Monday, Trump shot tariff letters to 14 countries, including Japan, South Korea, and South Africa, where duties range from 25 to 40 per cent. The total list now includes over 20 countries, as part of Trump’s ongoing crackdown on what he terms “non-reciprocal” trade practices.

The new tariffs will come into effect from August 1, 2025.

Previously, the Trump administration used a formula that calculated tariffs by taking the US trade deficit in goods with a specific country, dividing it by total imports from that country, and then halving the result.

A trade deficit occurs when a country imports more physical goods than it exports.