Deutsche Bank say this approach to calculating the tariffs “raises serious concerns about policy credibility, undermining the USD [the dollar].”

They draw three conclusions:

First, the US administration is squarely focused on penalizing countries with larger trade deficits in goods (services are ignored). This determination is highly mechanical, rather than a sophisticated assessment of tariff and non-tariff barriers. It is also in line with the declaration of a national emergency on the trade deficit used as a legal justification for the tariffs.

Second, there is a very large disconnect between communication in recent weeks of an in-depth policy assessment of bilateral trade relationships with different countries versus the reality of the policy outcome. We worry this risks lowering the policy credibility of the administration on a forward-looking basis. The market may question the extent to which a sufficiently structured planning process for major economic decisions is taking place. After all, this is the biggest trade policy shift from the US in a century. Crucially, major additional fiscal decisions are lining up over the next two months.

Third, the tariff calculation approach arguably makes for a more free-wheeling and open-ended nature to potential trade negotiations in coming months. It seems there are no specific and identifiable policy asks per se but ultimately a desire to reduce bilateral trade imbalances.

https://www.theguardian.com/us-news/live/2025/apr/03/business-news-live-updates-trump-tarrifs-asian-markets-nikkei-asx-wall-st-dow-jones-dollar-euro?CMP=share_btn_url&page=with%3Ablock-67ee42e78f08188975c64626#block-67ee42e78f08188975c64626