The latest round of U.S. tariffs isn’t about retaliation—it’s about trade deficits.
What some recent charts label as “Tariffs charged to the U.S.A.” are not tariffs at all. They’re simply the U.S. trade deficit divided by total U.S. imports from that country.
For example:
- In 2024, the U.S. goods trade deficit with Europe was $235.6 billion, while total imports from the EU reached $605.8 billion. That’s a 39% deficit, and the new tariff is calculated as half of that—20%.
- With China, the deficit was $295.4 billion on $438.9 billion in imports, or a 67% deficit. This results in a 34% additional tariff.
For a full breakdown of affected countries and rates, see this CBS News summary of Trump’s reciprocal tariffs by country.
A Shift from Strategy to Structure
This redefinition changes the nature of U.S. tariffs entirely.
Previously, tariffs were positioned as a temporary tool to encourage reciprocal access. But under the new model, even if other countries drop their tariffs, U.S. rates remain fixed—until the trade deficit shrinks.
That makes these tariffs structural, not tactical. They are designed to stay, slowly decreasing only if trade balances improve—something unlikely to happen quickly.
$1.2 Trillion Gap
In 2024, the total U.S. goods trade deficit reached $1.2 trillion. To eliminate it, that amount of production would need to shift back to U.S. soil.
This isn’t a short-term fix. It’s a long-haul strategy.
Electronics from China Take the Hardest Hit
These new tariffs don’t stand alone—they stack on top of earlier measures:
- 34% (new deficit-based tariff)
- +10% (existing blanket tariff)
- +10% (general surcharge)
- +7.5% to 25% (under Section 301 and IEEPA)
That adds up to as much as 79% total tariffs on some categories of electronics from China.
For more detail on how these tariffs are reshaping sourcing and product strategy, read China Tariffs in 2025: What They Mean for Electronics Manufacturing.
Taiwan Hit Too—But With Exceptions
Taiwan faces a 32% tariff due to a rising trade surplus—driven largely by the AI hardware boom and high U.S. demand for NVIDIA GPUs and related systems.
However, to avoid stifling the U.S. AI sector, Taiwanese ICs (integrated circuits) are exempted.
What this means: expect assembly of AI hardware to rapidly relocate to the U.S.. Foxconn, among others, already has new facilities under development.
If Taiwan lowers its surplus within the next 1–2 years, its tariff rate may adjust downward.
Why Latin America Stands to Gain
While many Asian countries face steep increases, Latin American nations, including Colombia, remain in the 10% “other” category—a significant cost advantage.
This makes Colombia a practical alternative for electronics assembly, especially for companies looking to reduce their exposure to China.
For companies exploring alternatives to China, see Electronics NOT Made in China: 5 Options To Avoid Tariffs.
Titoma’s design and manufacturing operations in Colombia are already set up to support this transition.
Ready to Shift Your Manufacturing Out of China?
Titoma helps companies reduce risk and simplify production by relocating electronics design and assembly to cost-effective, lower-tariff countries.
Our systems are built for smooth transitions.
Contact us to find out how we can help.
