Japan, South Korea seek to negotiate on tariffs before August deadline
WASHINGTON : Powerhouse Asian economies Japan and South Korea said today that they would try to negotiate with the US to soften the impact of sharply higher tariffs that President Donald Trump now plans to impose from the start of August.
Trump ramped up his trade war again yesterday, telling 14 nations that they would face tariffs ranging from 25% for countries including Japan and South Korea, to 40% for Laos and Myanmar.
However, with the start date pushed back to Aug 1, those countries were focusing on the new three-week window to press for an easier ride.
Japan wants concessions for its large automobile industry, top trade negotiator Ryosei Akazawa said today.
Akazawa said he held a 40-minute phone call with US commerce secretary Howard Lutnick in which the two agreed to actively continue negotiations.
However, he said he would not sacrifice Japan's agriculture sector – a powerful political lobby domestically – for the sake of an early deal.
South Korea said it planned to intensify trade talks over the coming weeks 'to reach a mutually beneficial result'.
Asked if the latest deadline was firm, Trump replied yesterday: 'I would say firm but not 100% firm. If they call up and they say we'd like to do something a different way, we're going to be open to that'.
Global stocks were flat to marginally higher today, as investors took in their stride the latest twist in the tariff saga, but the yen slid on the prospect of duties on Japanese goods.
Economists warned that the long-running tariff disputes risked stunting growth and pushing up prices, causing headaches for policymakers.
'The ongoing threat of higher tariffs intensifies stagflationary risks in the US and puts pressure on Europe to stimulate domestic demand further in order to offset headwinds in international trade,' said David Kohl, chief economist at Swiss-based bank Julius Baer.
EU eyes deal
The EU, which is the largest bilateral trade partner of the US, aims to strike a deal before Aug 1 with negotiations focused on 'rebalancing' and concessions for certain key export industries, a European source familiar with the negotiations said.
However, German finance minister Lars Klingbeil warned that the EU was prepared to retaliate if necessary.
'If we don't reach a fair trade deal with the US, the EU is ready to take counter measures,' Klingbeil said today, speaking in the lower house of parliament.
Some EU sources had said late yesterday that the bloc was close to an agreement with the Trump administration.
This could involve limited concessions to US baseline tariffs of 10% for aircraft and parts, some medical equipment and spirits.
Only two deals have been struck so far, with Britain and Vietnam.
Washington and Beijing agreed to a trade framework in June, but with many of the details still unclear, traders and investors are watching to see if it unravels before a separate, US-imposed Aug 12 deadline or leads to a lasting detente.
Spreading the pain
Trump said the US would impose tariffs of 25% on goods from Tunisia, Malaysia and Kazakhstan, with levies of 30% on South Africa, Bosnia and Herzegovina, climbing to 32% on Indonesia, 35% on Serbia and Bangladesh, 36% on Cambodia and Thailand and 40% on Laos and Myanmar.
Cambodia, hit hard by levies imposed in April, today hailed as a big success a reduction in the tariff rate from 49% to 36% and said it was seeking to negotiate a further cut.
The tariffs have been an issue for Cambodia's garments and footwear sector, a major employer and the biggest driver of its economy.
The US is also the main export market for Bangladesh's ready-made garments industry, which accounts for more than 80% of its export earnings and employs 4 million people.
'This is absolutely shocking news for us,' Mahmud Hasan Khan, president of Bangladesh Garment Manufacturers and Exporters Association, told Reuters today.
'We were really hoping the tariffs would be somewhere between 10%-20%. This will hurt our industry badly,' he added.
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The Star
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- The Star
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