Trump to put 25% tariffs on Japan, South Korea
WASHINGTON—President Donald Trump on Monday set a 25-percent tax on goods imported from Japan and South Korea, as well as new tariff rates on a dozen other nations that would go into effect on Aug. 1.
Trump provided notice by posting letters on Truth Social that were addressed to the leaders of the various countries. The letters warned them to not retaliate by increasing their own import taxes, or else the Trump administration would further increase tariffs.
“If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25 percent that we charge,” Trump wrote in the letters to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae-myung.
Continuing drama
He mixed his sense of aggression with a willingness to still negotiate, signaling the likelihood that the drama and uncertainty would continue and that few things are ever final with Trump.
Imports from Myanmar and Laos would be taxed at 40 percent, Cambodia and Thailand at 36 percent, Serbia and Bangladesh at 35 percent, Indonesia at 32 percent, South Africa and Bosnia and Herzegovina at 30 percent and Kazakhstan, Malaysia and Tunisia at 25 percent.
Wendy Cutler, vice president of the Asia Society Policy Institute who formerly worked in the office of the US Trade Representative, said the tariff hikes on Japan and South Korea were “unfortunate.”
Trump still has outstanding differences on trade with the European Union and India, among other trading partners. Tougher talks with China are on a longer time horizon in which imports from that nation are being taxed at 55 percent.
The S&P 500 stock index was down 0.8 percent in Monday trading, while the interest charged on 10-year US Treasury notes had increased to nearly 4.39 percent.
Legal challenge
Trump has declared an economic emergency to unilaterally impose the taxes which is under legal challenge, with the administration appealing a May ruling by the US Court of International Trade that said the president exceeded his authority.
Administration officials have said Trump is relying on tariff revenues to help offset the tax cuts he signed into law on July 4.
Trump has warned major retailers such as Walmart to simply “eat” the higher costs, instead of increasing prices in ways that could intensify inflation.
Boxing out China
His outline of a deal with Vietnam was designed to box out China from routing its America-bound goods through that country, by doubling the 20-percent tariff charged on Vietnamese imports on anything traded transnationally.
The United States ran a $69.4-billion trade imbalance in goods with Japan in 2024 and a $66-billion imbalance with South Korea, according to the Census Bureau.
According to Trump’s letters, autos would be tariffed separately at the standard 25 percent worldwide, while steel and aluminum imports would be taxed on 50 percent.
Trump has also said on social media that countries aligned with the policy goals of BRICS—composed of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates—would face additional tariffs of 10 percent.
