How Trump Calculated Botswana's 37% Import Tariff

On Wednesday 3 April, the Trump administration announced a slew of what they referred to as "reciprocal" tariffs against several countries and territories. Botswana was not spared, receiving a 37% import tariff in response to the 74% tariff that Botswana supposedly imposed on US goods.

However, a closer look into the way the Trump administration calculated the tariff reveals that their definition of what a "tariff" is might be slightly different from the rest of the world's definition.

According to data from the United States Trade Representative, in 2024, the US' trade deficit Botswana was $301 million, while US goods imports from Botswana were $405 million, comprising mainly of diamonds. 

To come up with the so-called tariff that countries supposedly imposed on the US, the Trump administration simply divided the US' trade deficit with a particular country.

This formula seems to hold in the case of Botswana:

$301 million (US trade deficit) / $405 million (US imports from Botswana) * 100 = 74%

In order to now come up with the "reciprocal" tariff that the US would impose on countries, the Trump administration simply divided the supposed tariff on US good by two. Again, the formula seems to hold in Botswana's case.

74/2 = 37%

The Trump administration has rebutted that it used such a simplified formula to calculate the tariffs, instead saying that the tariffs were calculated by "literally" measuring every country's tariffs and non-tariff trade barriers and using the formula below:

Economists have since pointed out that this "formula", when simplified, still boils down to just dividing the US' trade deficit with a country by the US' imports from that country, a very unconventional method of calculating tariffs.

What The Tariffs Means For Botswana

As one of the fastest growing export markets for Botswana's diamonds, the US is an important destination for Botswana's stones. So important is the US market that in March, Minister of Minerals & Energy Bogolo Kenewendo was reportedly coddling American Gen Z influencers as Botswana looks to promote natural diamonds to the US market amid decreasing demand.

According to veteran business journalist Victor Baatweng, the tariffs will mainly impact Botswana at diamond supply at two points.

"First, the 10% baseline on direct Botswana-to-U.S. exports raises costs for American importers like Tiffany or Signet, who might pass it on to consumers or pressure Botswana to lower prices," Baatweng wrote on X (formerly Twitter).

"Second, the 12% tariff on India hits the majority of Botswana’s diamonds, as India’s role as a middleman means its tariff rate could apply to the finished product."

With Botswana's economy recovery hinging on the recovery of the diamond market, one of the country's fastest growing market imposing a 37% import tariff further complicates this recovery. How the new government navigates this development will largely determine if economic recovery in 2025 will happen or will have to be held off.