He basically divides the trade deficit by imports for each country, gets that percentage, and divides it by 2 to arrive at the tariff
The actual method:
Consider an environment in which the U.S. levies a tariff of rate τ_i on country i and ∆τ_i reflects the change in the tariff rate. Let ε<0 represent the elasticity of imports with respect to import prices, let φ>0 represent the passthrough from tariffs to import prices, let m_i>0 represent total imports from country i, and let x_i>0 represent total exports. Then the decrease in imports due to a change in tariffs equals ∆τ_i*ε*φ*m_i<0. Assuming that offsetting exchange rate and general equilibrium effects are small enough to be ignored, the reciprocal tariff that results in a bilateral trade balance of zero satisfies:
https://ustr.gov/sites/default/files/files/Press/Releases/2025/Screenshot%202025-04-02%20200501.png
https://static01.nytimes.com/newsgraphics/2025-04-02-tariff-math/7c47dfa7-7bf8-4f83-b342-03ae9a499437/_assets/equation-china-middle.jpg