WashingtonThe president announced new duty rates on a dozen more countries on Monday, which will take effect on August 1st, along with a 25% levy on items imported from South Korea and Japan.
Trump gave notice by publishing letters to the leaders of the other nations on Truth Social. The letters threatened that if they raised their own import duties in retaliation, the Trump administration would raise tariffs even more.
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The 25% that we charge will be increased by the amount you decide to raise your tariffs, if you decide to do so for whatever reason. Trump wrote to South Korean President Lee Jae-myung and Japanese Prime Minister Shigeru Ishiba.
The letters weren’t exactly Trump’s last words on tariffs; rather, they were just another chapter in the global economic drama that he has made his own. His actions have sparked concerns that economic expansion might stall, if not increase the risk of a recession for the US and other countries. However, Trump is certain that tariffs are required to finance the tax cuts he signed into law last Friday and restore home manufacturing.
He indicated that few things are ever final with Trump and that the drama and uncertainty would likely continue by balancing his aggressiveness with a readiness to continue negotiating.
Myanmar and Laos would impose a 40% tax on imports, followed by Cambodia and Thailand (36%), Bangladesh and Serbia (35%), Indonesia (32%), South Africa and Bosnia and Herzegovina (30%), and Kazakhstan, Malaysia, and Tunisia (25%).
Trump implied that he was being generous with his tariffs by including the phrase only before disclosing the rate in his letters to the foreign leaders. In general, however, the letters were formatted in a regular way, to the extent that the letter to Bosnia and Herzegovina inadvertently addressed its female leader, Eljka Cvijanovi, as Mr. President.
Several deals have not yet been reached in trade negotiations.
According to White House press secretary Karoline Leavitt, Trump was establishing custom trade arrangements for every nation on the earth by setting the prices himself, and this administration is still focused on that.
In a sharp contrast to all of his predecessors’ more official trade agreement-negotiating procedures, Trump intends to continue posting the letters he sends to his counterparts on social media before mailing them the paperwork, a now-familiar trend.
The fact that the letters contain Trump’s own rate preference rather than agreed-upon settlements indicates that the private discussions with foreign delegations did not provide fruitful outcomes for either party.
The tariff increases on South Korea and Japan are regrettable, according to Wendy Cutler, vice president of the Asia Society Policy Institute and a former employee of the U.S. Trade Representative’s office.
According to Cutler, both have been strong allies on issues of economic security and have much to offer the US on high-priority issues including energy cooperation, shipbuilding, semiconductors, and vital minerals.
Trump continues to have unresolved trade disputes with a number of trading partners, including the European Union and India. A longer time horizon for tougher negotiations with China involves a 55% levy on goods from that country.
After proposing a trade framework on May 20, the office of South African President Cyril Ramaphosa said in a statement that Trump’s tariff rates misrepresented the country’s trade relationship with the United States and that it would continue its diplomatic efforts to create a more equitable and mutually beneficial trade relationship with the United States.
Increased tariffs cause market concerns and increase uncertainty.
Monday trading saw a 0.8% decline in the S&P 500 stock index and a rise in the interest rate on 10-year U.S. Treasury notes to about 4.39%, which may result in higher mortgage and vehicle loan rates.
Despite the fact that many American consumers now appreciate cars, electronics, and other products from South Korea and Japan, Trump has unilaterally imposed the taxes under the pretext of an economic emergency, claiming they are a remedy for historical trade deficits. Under normal circumstances, the constitution gives Congress the authority to impose tariffs; nevertheless, executive branch investigations into national security threats may also lead to tariffs.
The government is contesting a May decision that stated the president overreached himself, casting doubt on Trump’s ability to levy tariffs through an economic emergency.
He challenges two important Asian allies, Japan and South Korea, who may offset China’s economic might, but it’s unclear what he stands to gain strategically from this. This is another reason for the tariffs.
Depending on our partnership with your country, these tariffs could change either way. Both letters were written by Trump.
Trump is preparing for a potentially turbulent period of negotiations between the United States and its trading partners to achieve new agreements because the new tariff rates take effect in about three weeks.
Scott Lincicome, a vice president of the libertarian think tank Cato Institute, stated, “I don’t see a huge escalation or a walk back, it’s just more of the same.”
When Trump first announced tariff rates on dozens of nations, including 25% on South Korea and 24% on Japan, the financial markets were rocked. Trump announced a 90-day negotiation process that would impose a baseline 10% tariff on goods from the majority of nations in an effort to calm the markets. Thus far, the rates in Trump’s letters are either the same as or very similar to his tariffs from April 2.
Although several administration officials have indicated that the three-week period before implementation is similar to overtime for further discussions that could alter the rates, the 90-day negotiating process officially ends on Wednesday. According to Leavitt, Trump intends to sign an executive order on Monday postponing the official tariff hikes until August 1.
Due to their intricacy, congressionally ratified trade agreements have historically taken years to negotiate.
According to administration officials, Trump is depending on tariff revenues to partially offset the tax cuts he signed into law on July 4. This might result in a larger portion of the federal tax burden falling on the poor and middle class because importers would probably pass along a large portion of the tariffs’ costs. Instead of raising prices in ways that could exacerbate inflation, Trump has advised big merchants like Walmart to just absorb the extra costs.
A three-week delay in the tariffs’ implementation is unlikely to be enough for substantive negotiations, according to Josh Lipsky, chair of international economics at The Atlantic Council.
Lipsky stated, “I interpret it as an indication that he is sincere about the majority of these tariffs and that it is not just a negotiating stance.”
Trade disparities continue, and additional tariff increases could occur.
Only two trade frameworks have emerged from Trump’s negotiations thus far, despite his team’s pledge of 90 deals in 90 days.
By tripling the 20% duty imposed on Vietnamese imports on everything traded internationally, his proposed agreement with Vietnam was obviously intended to prevent China from passing via that nation with its commodities headed for the United States.
Although British imports would typically be subject to a 10% duty, the quotas in the negotiated United Kingdom framework would spare that country from the higher tariff rates being charged on steel, aluminum, and automobiles.
According to the Census Bureau, the United States had a $66 billion trade imbalance with South Korea and a $69.4 billion trade imbalance with Japan in 2024. The discrepancies between what the United States imports and exports to a nation are known as trade deficits.
Trump’s letters state that although steel and aluminum imports would be subject to a 50% levy, automobiles would be subject to a separate 25% global duty.
Trump has previously clashed with South Korea and Japan over trade, and the new levies imply that his first-term agreements fell short of the expectations of his administration.
During Trump’s first term in 2018, his administration hailed a revised trade deal with South Korea as a significant victory. Additionally, in 2019, Trump signed a limited agreement with Japan on digital trade and agricultural products, which he described at the time as a major win for American farmers, ranchers, and producers.
Trump has also stated on social media that 10% further tariffs will be applied to nations who support the policy objectives of BRICS, an alliance made up of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates.
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Gerald Imray, a writer with the Associated Press in Cape Town, South Africa, provided reporting.
