Trump's Tariff Formula Confound Economists On Faulty Assumptions, Nil Economic Rationale—Here's Why

US President Donald Trump imposed additional 25% tariffs on import of Indian goods, over India's continued purchase of Russian crude oil. The total tariff on India has now doubled to 50%.
Trump's latest move comes a week after he announced 25% reciprocal tariffs against the country, starting from Aug. 7, citing wide "fiscal deficit" between India-US trading relations. After the order, the total tariff on Indian goods, barring a small exemption list, will effectively be 50%.
According to experts, Trump's formula for calculating tariffs is confounding economists, many of whom argue it rests on faulty assumptions and lacks economic rationale. Trump has labelled India as the "Tariff King" and an "abuser" of trade duties, suggesting the country unfairly protects its markets through high customs duties.
But the data reveals India’s simple average tariff, which comprises levies on both agriculture and non-agriculture products is around 16%. This is in the same league as Bangladesh (14.1%), Turkey (16.2%) and Argentina (13.4%).However India’s weighted average tariff is only around 4.6%.
Trump has described India as a “dead economy” and said the US does “very little business” with the country The truth is The U.S. is India’s 5 largest trading partner for the fourth consecutive year in 2024-25 with bilateral trade valued at $131.84 billion. In the last fiscal, India’s exports to the U.S. rose by 11.6% to $86.51 billion as against $77.52 billion in 2023-24. Under “Mission 500,” both sides aim to double bilateral trade to 6 500 billion dollars by 2030.
Trump's calculations for tariff is wrong: Here's why
Donald Trump has turned global trade policy into a tool for personal grudges and political drama, with the Brazil episode being a prime example. He threatened a 50% tariff on Brazilian goods unless President Lula halted the trial of Jair Bolsonaro, Trump's far-right ally and former Brazilian president.
The threat was not based on trade concerns; the US actually enjoys a surplus with Brazil, but purely on ideological and personal grounds. Trump openly called the trial a “witch hunt” and used his social media platform to pressure Brazil’s democratic institutions, saying he told Lula to “stop this nonsense” or face economic consequence.
In another reckless trade salvo, Donald Trump has slapped 100% tariffs on semiconductor imports, hitting Japanese tech giants hard. Without warning or negotiation, Trump’s unilateral move throws Asia’s supply chains into disarray and jeopardizes key allies.