When I hear President Donald Trump and his allies talk about his drastic tariff plans, a word comes to mind: “Crime.”
During the April 2nd announcement of what he called “liberation day,” Trump released a list of new tariffs of up to 50% in virtually every country. (His April 9th course change increased Chinese tariffs and maintained a 10% tariff on almost all trading partners.)
When he announced his first tariff plan, Trump said, “For countries that treat us badly, we calculate the total rate of all tariffs, non-financial barriers and other fraudulent activities.”
Over the next few days, figures from other administrations repeated accusations of “fraud.”
“Our leaders have allowed foreigners to rig, cheat, steal, steal and plunder the rules of the game,” White House adviser Stephen Miller told Fox News on April 4th. “It cost American wealth trillions of dollars. … They stole our industry.”
“It’s all this that these foreign countries trick us into explicitly designing us and are sanctioned by the World Trade Organization,” White House adviser Peter Navarro said in an interview with Fox News on April 6th.
Are these now-now-facing countries facing rich tariffs really cheating on the US in trade?
What evidence of fraud?
The White House provided no evidence.
Trade misconduct occurs – a real charge about it could be ruled by the World Trade Organization – the White House formula for calculating tariff charges relied on how much disparity the country has with the United States, not evidence of fraud.
“Kent Jones, an emeritus professor of economics at Babson University who specializes in trade policy, said Trump and his allies tend to use the term “fraud” as any action that leads to a bilateral trade deficit in goods with the United States.” “In the face of this, there is no economic validity in this definition, because bilateral trade balances are generally determined by specific patterns of trade through commodities, not by trade or other government policies.”
An analysis of the 10 countries with the highest tariff rates, released on April 2, showed that they were almost poor and small. And it shows that it is not unfair trade practices, but rather that it is more susceptible to the highest rates. Such countries export the resources they have, and are too small and too poor, or both to buy more from the US.
The White House did not respond to inquiries for this article. White House press director Karoline Leavitt said in a daily briefing on April 8th that country-by-country tariff rates are “very carefully designed” and that “non-financial” factors such as tariffs collected by trade partners and regulations that hinder trade.
What does it mean to “cheat” trade?
There are ways that countries can “chew” trade by ignoring the rules and norms of international trade policy. One way is to “dump.” This means selling goods to trading partners at artificially discounted prices. The other is through excessive government subsidies to producers accusing the US and other countries of China. Some of these complaints have been supported when they were taken to the WTO.
In these cases, the trading partner can assess the tax-tax on imported goods in order to attempt to cancel the distortion. If this process cannot be resolved amicably, the parties can go to the World Trade Organization to arbitrate the dispute.
“A good example of this is the decades-long coniferous wood trade dispute between Canada and the United States, which claims Canada is unfairly subsidizing the coniferous wood industry through administratively determined fees.
Another type of fraud involves currency manipulation. In this operation, the country interferes with currency exchange rates in a way that makes exports cheaper to foreign buyers. This is what accuses the US and other countries of doing China.
Sometimes trading partners accused the United States of fraud. Critics rubbed when the US banned trade in certain products, saying it would threaten national security.
By placing new tariffs on Canada and Mexico and rejecting the US Mexican-Canada agreement he negotiated during his first term, Trump can be argued that he has been “deceived” in recent weeks. The agreement set trade rules between the three countries and did not allow additional tariffs Trump imposed on both.
How did the White House decide on the new tariff rate?
The White House formula for calculating the April 2nd tariff plan came from some basic numerical inputs. This formula splits the US trade deficit (not services) in a given country by the total goods imported from that country, then splits it in two. Even if this calculation produces few results, all countries start at a minimum of 10%.
Some people criticize the formula, but it is primarily based on how much trade deficit the United States has with a particular country. Nothing in its formula explains behavior that is generally considered to be a type of “fraud.”
Many of these trade imbalances can be explained by factors that have nothing to do with breaking the rules.
What do the top 10 customs countries have in common?
We looked at the 10 countries or territories where Trump’s April 2 plan allocated the highest tariff rate: Lesotho (50%), St. Pierre and Michelon (50%), Cambodia (49%), Laos (48%), Madagascar (47%), Vietnam (46%), Maianma (44%), Maianma (44%), Maianma (44%) and Syria (41%).
One thing these countries have in common is the higher proportion of exports to the US compared to imports from the US. For example, Lesotho’s exports to the United States are approximately 85 times more value than imports from the United States. The closest ratio in Syria is still a 5:1 export to imports.
These countries share other characteristics. One is that they are poorer than the US.
In Gross Domestic Product (GDP), a general measure of income by country, the US figure is 163 times that of Madagascar. Vietnam is the most equal country, but once again, the US GDP is 19 times higher than Vietnam.
These countries also have a small population. The US population is 100,000 times the population of the Falkland Islands. The closest of these countries is Vietnam. The United States is about three times the population.
Most of these countries make up a small portion of the US overall trade volume. Vietnam has the largest share. Its exports account for just 4% of the total US imports. The other nine are much smaller, with no more than half the share of US deals.
Why are small, poor countries more likely to have a trade surplus with the US?
Experts say it’s natural for small and poor countries to have trade surplus with the US.
Madagascar, an island nation off the coast of Africa’s mainland, “has about 80% of the global supply of vanilla,” Burkhart said. “The US cannot produce vanilla, but they need it with groceries, so they buy it. Madagascar is a relatively poor country, so you can’t make up for it by purchasing something made with exported vanilla.”
St. Pierre and Michelon, French territory off the coast of Canada, “in 2024 exported a large halibut catch to the United States as part of the territorial fishing dispute,” Burkhart said. However, with only 5,500 people, the island’s territory is “so small that it hasn’t bought anything from the US.”
Lesotho, a South African landlocked country, “exports diamonds and textiles and does not import many expensive capital and technology-intensive US goods,” Jones said. “Why should bilateral trade with the US be balanced?”
Experts said it is unrealistic to expect tariffs to change the trade imbalances in these small economies. “There’s no way the average Madagascar resident can buy a Cadillac Escalade,” says Douglas Holtz Ark, president of the Center Right America Action Forum, referring to US-made SUVs that could cost between $87,000 and $160,000 or more.
Rather, these countries are raising the economic hand that climate, location and natural resources deal with them. In Sri Lanka, the main export is tea. In war-torn Syria, it is olive oil. In Laos, one of the exports is potash, an agricultural input.
Even if these countries achieve balanced trade with the US, it does not necessarily save them from tariffs. In 2024, the US had trade surpluses with countries such as the Netherlands, Hong Kong, the United Arab Emirates, Australia, the UK, Panama, Brazil, Belgium and the Dominican Republic, but these countries suffered a 10% minimum tariff.
One thing the top 10 countries don’t do is cheating on trade, experts agreed.
“If Trump wants to argue that tariffs on US goods are too high, or they are manipulating currency values, or dumping them, or they use secret internal tax systems and regulations to dislike US exports, they can document these practices and use the US trade law to justify the controlled trade restrictions to modify them.”
Claire Clanford contributed to this report.