President Trump’s new tariffs on more than 100 countries used the same simple formula to calculate the rate for each of them.

The formula’s central value is the trade deficit, the difference between imports and exports between each country and the United States, for the year 2024.

The slightly more detailed math looks like this:

Mr. Trump has said these tariffs will reduce trade imbalances and level the international playing field.

But his one-size-fits-all formula is blunt: It applies the exact same math to countries whether they have hefty trade barriers or wide-open markets. It considers only the size of a trade deficit, not why the deficit exists.

And it has some key choices hidden within it. Change any one of those choices, and the resulting tariffs would look very different.

Here, we take you through these variables so you can see how different choices might yield big changes for the countries that trade with the United States.

Goods and services

The Trump administration calculated the trade deficit using only goods — physical items that can be shipped — and not services, such as technology, media, banking and tourism. (A DVD counts; a Netflix subscription doesn’t.)

That’s great news for Bermuda, the archipelago nation that exports few goods but plenty of financial services to the United States (thanks to its favorable tax laws, American companies like to bank there). Under the current rules, it pays a 10 percent tariff. If its service dollars were counted, it would pay 37 percent.

But it’s bad news for most of America’s other trading partners. The United States imports more goods from the European Union than it sends. But it exports more services than it buys. If you counted services in the trade gap in Mr. Trump’s formula, the tariffs on the E.U. would shrink almost in half.

Many countries are in the same boat as the European Union, because the United States is the world’s largest exporter of services. Switzerland, in particular, would see its tariffs drop quite a bit if services were taken into account. It exports plenty of pharmaceuticals and watches to America, but if you count all the services it imports from America, its trade deficit shrinks significantly.

The Trump administration has emphasized goods because it blames large goods deficits for a decline in manufacturing jobs. But many economists argue that ignoring services leaves out a key area of trade.

Yearly variation

The Trump administration used 2024 data to calculate the tariff rate, but trade deficits can vary year to year.

Consider this: In 2024, the United States exported more to Saudi Arabia than it imported, but the opposite was true in 2023. Bolivia was the reverse — the United States had a trade deficit with Bolivia in 2024 but a surplus in 2023.

Picking the most recent year might not really capture whether a country has significant trade barriers. It might, instead, be telling us something about the state of a country or the world’s economy at that moment.

If the administration had smoothed out any oddities by using the average trade deficit over the last five years, tariffs on large countries wouldn’t change much. China’s tariffs would rise by one percentage point; the European Union’s would shift by even less.

But for some countries, a different time frame could have meaningfully changed the calculated values — not necessarily to their benefit.

For example: The United States had a tiny trade deficit with Equatorial Guinea in 2024, so the African country is getting a much better deal than it would have in previous years, when the deficit was several times higher. Brunei, on the other hand, has sold more to the U.S. than it has bought the last couple of years. Look back a little further, and it would’ve benefited from the years it spent as a net buyer of American goods.

The new tariffs will very likely cause changes in trading patterns, meaning even more year-to-year variation than before. If the administration decides to keep the formula intact for years, it may need to update the trade deficit values regularly.

The 10 percent floor

The Trump administration set a 10 percent minimum tariff for every country. At least 100 countries and territories that buy more from the United States than they sell — which seems to be what Mr. Trump wants — were still given the 10 percent tariff.

The United States has a large trade surplus with Australia — it exports more than twice as much to Australia as what it buys — indicating the kind of trade relationship Mr. Trump is seeking. And yet Australia will be charged the same 10 percent tariff rate as New Zealand, with which the United States has a calculated 20 percent trade deficit. (If anything, Australia would impose a steep tariff on U.S. goods if it followed Mr. Trump’s system.)

If the administration had not imposed a 10 percent minimum, the tariffs on some of America’s major trading partners might look like this:

Everything else

Using the current Trump formula as a starting point, there are many arbitrary choices that would result in different tariffs and a different world economy. We played out every iteration of our choices from above, to see what tariffs might look like under different decisions.

Here are the countries with the widest ranges of possible tariff rates, based on those scenarios.

Beyond that, the Trump administration made several other arbitrary choices in its formula.

The biggest is that the formula divides the result by two. Mr. Trump said this was chosen to be “kind,” essentially halving the calculated tariff rates. Of course, he could have chosen to divide by three or four to be more kind or not divide at all to be less kind.

The full formula also multiplies the tariff rate by two other variables that we didn’t show above, meant to approximate the “price elasticity of import demand” and the “tariff pass-through to retail prices.” But the numbers the administration chose for those variables are 4 and 0.25, which cancel out (4 × 0.25 = 1) and have no effect on the final rate.

The tariff for Afghanistan is set at 10 percent, though the formula would have resulted in a 25 percent fee. The administration has not explained why Afghanistan is the sole country with different math.

A handful of countries were excluded from the new tariffs, including Canada and Mexico, which face separate tariff negotiations with Mr. Trump, and Russia and North Korea, which have other sanctions already placed on them. For China, on the other hand, the new tariffs are in addition to existing tariffs already in place, bringing China’s total tariff rate to at least 54 percent.

Exceptions on certain products also create some quirks. The United States will charge a 39 percent tariff on all goods from Iraq, largely because Iraq exports a lot of oil. However, oil and gas imports have been excluded from tariffs. This means that products like textiles or dates imported from Iraq will be charged a large tariff because of Iraq’s oil exports, even though the oil exports themselves will not be charged tariffs.

It is hard to say how long the formula will remain intact. Mr. Trump said Thursday that he was willing to make deals with other countries if the United States received something “phenomenal.”

WASHINGTON — A second day of market devastation shook Washington on Friday, vanishing more than $5 trillion in value in one of the largest 48-hour losses on record — an extraordinary rout caused not by pandemic, war, terrorism or bank failure, but by policy set by the American president.

The policy, announced by President Trump on Wednesday, would levy steep tariffs on nearly every nation in the world in the coming days, starting with a base tariff rate of 10% but climbing higher for some of the largest U.S. trading partners, including China, South Korea, Japan and the European Union.

The market drop has prompted a small but influential group of Republican senators to partner with Democrats in a nascent effort to wrest back control over tariff policy from Trump.

The Standard and Poor’s 500, NASDAQ and the Dow Composite all reeled over the news from the morning bell to close. The Dow dropped 2,231.07 points, or 5.5%, in its largest drop since the pandemic started, following a 1,679-point drop the day prior. The S&P 500 fell 5.97% to 5,074.08, and the NASDAQ dropped 5.8%, to 15,587.79, entering bear market territory.

Before the markets opened Friday, China announced it would reciprocate with a 34% tariff on imported U.S. goods. And as markets spiraled, the Federal Reserve chair, Jerome Powell, warned of “persistent” negative effects from the new trade policy.

“We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation,” Powell said Friday. “Tariffs are highly likely to generate at least a temporary rise in inflation.”

Reacting to the markets, Treasury Secretary Scott Bessent told Tucker Carlson in an interview on Friday that “Wall Street’s done great. It can continue doing well.” But, he added, “it’s Main Street’s turn.”

“This is transformational for the American economy, for the American worker and for the new Republican alignment,” Bessent said. “I think this is the beginning of a process. We are going to reindustrialize. We have gone to a highly financialized economy — we have stopped making things, especially a lot of things that are relevant for national security.”

J.P. Morgan increased its assessment of the risk of recession this year to 60%, up from a 40% chance it had published just days prior. And the World Trade Organization warned of deep trouble to come if Trump refuses to change course.

“While the situation is rapidly evolving, our initial estimates suggest that these measures, coupled with those introduced since the beginning of the year, could lead to an overall contraction of around 1% in global merchandise trade volumes this year, representing a downward revision of nearly four percentage points from previous projections,” said Ngozi Okonjo-Iweala, director-general of the WTO. “I’m deeply concerned about this decline.”

Asked about the chances of a U.S. and global recession hitting this year, Senate Minority Leader Chuck Schumer, a Democrat from New York, said, “I’m very worried about it.”

“This is one of the most disastrous and poorly thought out policies that the Trump administration has done thus far, and that’s saying a lot,” he added.

Responding to the crisis, Sen. Charles E. Grassley (R-Iowa) partnered with Democratic Sen. Maria Cantwell from Washington state to introduce a bill that would require the president to submit new tariff policies to Congress for notification, review and approval.

“I’ve long expressed my view that Congress has delegated too much authority on trade to the executive branch under Republican & Democrat presidents,” Grassley wrote on X.

The bipartisan bill already has three additional Republican sponsors — Sens. Jerry Moran of Kansas, Lisa Murkowski of Alaska and Mitch McConnell of Kentucky. Other Republicans, including Trump supporter Sen. Thom Tillis of North Carolina, are expressing interest in the bill.

The Grassley-Cantwell bill marks the second time senators pushed back on Trump’s new import taxes in just a week. On Wednesday, in a rare rebuke of the president, the Senate passed a resolution Wednesday designed to thwart the imposition of tariffs on Canada.

Four Republicans — including Murkowski and McConnell — joined all Democrats in passing the resolution on a 51-48 vote.

Democratic leadership in the House of Representatives hopes the Grassley-Cantwell bill might have a path to passage in their chamber eventually, but one senior congressional aide said that leadership is doubtful anything will move in the short term.

“I don’t see it yet,” the aide said, granted anonymity to discuss internal deliberations, “but down the road, it’s possible.”

The White House said that its base tariff rate of 10% would go into effect at midnight Saturday, and that its country-specific duties would go into force Wednesday.

Trump, meanwhile, told investors on social media Friday, “MY POLICIES WILL NEVER CHANGE.”

But in a separate post, the president said he had discussed a deal with leadership in Vietnam — one of the nations hardest hit, with a 46% tariff rate — in a sign he is willing to negotiate over the policy.

Trump stated that Vietnam would be willing to cut its tariffs “down to ZERO” to strike an agreement with the United States. But Vietnam’s tariffs on the few U.S. goods it purchases are already low. Instead, the high rate imposed by the Trump administration on Vietnam actually targets the U.S. trade deficit with Vietnam — a capitalist result of U.S. consumers wanting to purchase more Vietnamese goods than the other way around.

As with other countries, such as Israel and Switzerland, which have no import duties on U.S. goods, it is unclear what will be required from each country for Trump to lower or eliminate rates. A consistent measure for success has not been articulated by the administration. To the contrary, senior aides to Trump have repeatedly referred to the 10% baseline tariff rate as a new normal.

Cambodia, hit with a 49% import tax, also asked Trump on Friday to postpone implementation of the new rate.

The president is in Florida golfing at his resort for the weekend.

The E.U. has the second-largest consumer market in the world behind America; China is third. But China and the E.U. have not exactly been cozy in recent years. Europe has regularly blasted China for overproducing and dumping artificially cheap products on the global market, and European leaders have criticized China’s stance toward Russia’s war in Ukraine, among other political and social issues.

Still, the E.U. is staring down 20 percent across-the-board tariffs in the United States, and even higher levies on major products like cars and trucks. China is confronting rates in excess of 50 percent. There’s a small chance that those tariffs could drive the two large economies closer together, experts said — an unintended consequence at a time when Mr. Trump’s America has been trying to weaken China.

There have been early hints of a thaw. The E.U. imposed higher tariffs on Chinese-made electrical vehicles last year, but China’s commerce ministry said at a news conference on Thursday that the two sides had agreed to restart negotiations. Olof Gill, an E.U. spokesman for trade, said officials had agreed to “continue discussions” on electric vehicle supply chains and take a “fresh look” at pricing.

But there is an even greater possibility that this moment will tear the E.U. and China further apart. China’s reduced access to American consumers could prod its companies to send even more cheap metals, chemicals and other products in Europe’s direction, worsening concerns about dumping and heightening already-high tensions on other matters. Relations between the two nations could deteriorate, widening the damage as America blows up longstanding global trade patterns.

“There’s two ways that this could play,” said Theresa Fallon, an analyst at the Center for Russia, Europe, Asia Studies in Brussels. “Europe is in a really tough position.”

Europe is responding quickly to Mr. Trump’s trade war. It plans to finalize next week initial lists of goods destined for retaliatory tariffs, and officials have promised more will come. It is also trying to negotiate to get rid of the tariffs, with the E.U. trade commissioner set to meet his U.S. counterparts through teleconference on Friday.

If the U.S. tariffs are not quickly negotiated away, Europe — and China — could find themselves looking for new consumers.

Another big part of Europe’s strategy? Making new friends.

Since late last year, the bloc has worked to expand relations with India, South American countries, South Africa, South Korea and Mexico. It has also drawn nearer to Canada and the United Kingdom, especially on defense issues.

Yet the U.S. is difficult to replace with one-off trade deals elsewhere because of the sheer size of its consumer market: $18.8 trillion in 2024, according to World Bank data. The E.U. trails at about $10 trillion, China at about $7 trillion. America is the E.U.’s most important export market.

Filling a U.S.-shaped void with China, while mathematically obvious, would be tricky. China and the E.U. have been moving further apart in recent years, with declining trade flows, and regular accusations by the E.U. that China is using trade practices that distort the market.

Europe’s dilemma when it comes to China has been on full display in the way that European leaders have talked about the Asian nation in recent months.

“We must engage constructively with China,” Ursula von der Leyen, who heads the E.U.’s executive arm, said during a speech in Davos, Switzerland, in January. She talked about expanding trade and investment ties “where possible.”

But when Mr. Trump’s tariff announcements came out this week, a flood of cheap goods coming from Asia was an immediate concern.

“We will also be watching closely what indirect effects these tariffs could have, because we cannot absorb global overcapacity, nor will we accept dumping on our market,” Ms. von der Leyen warned in her televised response on Thursday to the Trump tariffs.

The E.U. and China are to have a summit this year, though details on timing and location have yet to be determined.

Noah Barkin, a Berlin-based visiting senior fellow at the German Marshall Fund and a specialist on China, said: “Trump’s tariffs are likely to divert a massive amount of Chinese exports into the E.U.”

“The bloc is likely to throw its entire trade policy toolbox at Beijing in response,” he added. “It is difficult to envision a scenario where this ends well for the E.U.-China relationship.”