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Chicago Tribune
6 hours ago
- Chicago Tribune
President Trump puts 25% tariffs on Japan and South Korea, plus new import taxes on five other nations
WASHINGTON — President Donald Trump on Monday set a 25% tax on goods imported from Japan and South Korea, as well as new tariff rates on Malaysia, Kazakhstan, South Africa, Laos, Myanmar and Tunisia, all of which 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% that we charge,' Trump wrote in the letters to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae-myung. The letters were not the final word from Trump on tariffs, so much as another episode in a global economic drama in which he has placed himself at the center. His moves have raised fears that economic growth would slow to a trickle, if not make the U.S. and other nations more vulnerable to a recession. But Trump is confident that tariffs are necessary to bring back domestic manufacturing and fund the tax cuts he signed into law last Friday. 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%, South Africa at 30% and Kazakhstan, Malaysia and Tunisia at 25%. Trump placed the word 'only' before revealing the rate in his letters to the foreign leaders, implying that he was being generous with his tariffs. White House press secretary Karoline Leavitt indicated at a news briefing that similar letters to approximately four other countries also would be issued Monday. Following a now well-worn pattern, Trump plans to continue sharing the letters sent to his counterparts on social media and then mail them the documents, an stark departure from the more formal practices of all his predecessors when negotiating trade agreements. The letters are not agreed-to settlements but Trump's own choice on rates, a sign that the closed-door talks with foreign delegations failed to produce satisfactory results for either side. Leavitt said that Trump was by setting the rates himself creating 'tailor-made trade plans for each and every country on this planet and that's what this administration continues to be focused on.' Wendy Cutler, vice president of the Asia Society Policy Institute who formerly worked in the office of the U.S. Trade Representative, said the tariff hikes on Japan and South Korea were 'unfortunate.' 'Both have been close partners on economic security matters and have a lot to offer the United States on priority matters like shipbuilding, semiconductors, critical minerals and energy cooperation,' Cutler said. 'Moreover, companies from both countries have made significant manufacturing investments in the U.S. in recent years, bringing high-paying jobs to U.S. workers and benefiting communities all around the country.' 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%. The S&P 500 stock index was down nearly 1% in Monday afternoon trading, while the interest charged on the 10-year U.S. Treasury noted had increased to nearly 4.39%, a figure that could translate into elevated rates for mortgages and auto loans. Trump has declared an economic emergency to unilaterally impose the taxes, suggesting they are remedies for past trade deficits even though many U.S. consumers have come to value autos, electronics and other goods from Japan and South Korea. The constitution grants Congress the power to levy tariffs under normal circumstances, though tariffs can also result from executive branch investigations regarding national security risks. It's unclear what he gains strategically against China — another stated reason for the tariffs — by challenging two crucial partners in Asia, Japan and South Korea, that could counter China's economic heft. 'These tariffs may be modified, upward or downward, depending on our relationship with your Country,' Trump wrote in both letters. Because the new tariff rates go into effect in roughly three weeks, Trump is setting up a period of possibly tempestuous talks among the U.S. and its trade partners to reach new frameworks. 'I don't see a huge escalation or a walk back — it's just more of the same,' said Scott Lincicome, a vice president at the Cato Institute, a libertarian think tank Trump initially roiled the financial markets by announcing tariff rates on dozens of countries, including 24% on Japan and 25% on South Korea. In order to calm the markets, Trump unveiled a 90-day negotiating period during which goods from most countries were taxed at a baseline 10%. So far, the rates in the letters sent by Trump either match his April 2 tariffs or are close to them. The 90-day negotiating period technically ends on Wednesday, even as multiple administration officials suggested the three-week period before implementation is akin to overtime for additional talks that could change the rates. Trump plans to sign an executive order on Monday to delay the official tariff increases until Aug. 1, Leavitt said. Congressionally approved Trade agreements historically have sometimes taken years to negotiate because of the complexity. Administration officials have said Trump is relying on tariff revenues to help offset the tax cuts he signed into law on July 4, a move that could shift a greater share of the federal tax burden onto the middle class and poor as importers would likely pass along much of the cost of the tariffs. Trump has warned major retailers such as Walmart to simply 'eat' the higher costs, instead of increasing prices in ways that could intensify inflation. Josh Lipsky, chair of international economics at The Atlantic Council, said that a three-week delay in imposing the tariffs was unlikely sufficient for meaningful talks to take place. 'I take it as a signal that he is serious about most of these tariffs and it's not all a negotiating posture,' Lipsky said. Trump's team promised 90 deals in 90 days, but his negotiations so far have produced only two trade frameworks. His outline of a deal with Vietnam was clearly designed to box out China from routing its America-bound goods through that country, by doubling the 20% tariff charged on Vietnamese imports on anything traded transnationally. The quotas in the signed United Kingdom framework would spare that nation from the higher tariff rates being charged on steel, aluminum and autos, though British goods would generally face a 10% tariff. 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. The trade deficit was $24.9 billion with Malaysia, $1.3 billion with Kazakhstan, $8.9 billion with South Africa, $763 million with Laos, $577 million with Myanmar. The trade deficits are the differences between what the U.S. exports to a country relative to what it imports. According to Trump's letters, autos would be tariffed separately at the standard 25% worldwide, while steel and aluminum imports would be taxed on 50%. This is not the first time that Trump has tangled with Japan and South Korea on trade — and the new tariffs suggest his past deals made during his first term failed to deliver on his administration's own hype. In 2018, during Trump's first term, his administration celebrated a revamped trade agreement with South Korea as a major win. And in 2019, Trump signed a limited agreement with Japan on agricultural products and digital trade that at the time he called a 'huge victory for America's farmers, ranchers and growers.' Trump has also said on social media that countries aligned with the policy goals of BRICS, an organization composed of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates, would face additional tariffs of 10%.
Boston Globe
7 hours ago
- Boston Globe
What to know about Trump's new trade move against Japan, South Korea, and five other nations
'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% that we charge,' Trump wrote in the letters to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae-myung. Advertisement The letters were not the final word from Trump on tariffs, so much as another episode in a global economic drama in which the U.S. president has placed himself at the center. His moves have raised fears that economic growth would slow to a muddle, if not make the U.S. and other nations more vulnerable to a recession. But Trump is confident that tariffs are necessary to bring back domestic manufacturing and fund the tax cuts he signed into law last Friday. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up Imports from Malaysia would be taxed at 25%, Myanmar at 40%, Laos at 40%, South Africa at 30% and Kazakhstan at 25%. Trump placed the word 'only' before revealing the rate in his letters to the foreign leaders, implying that he was being generous with his tariffs. Advertisement Trade talks have yet to deliver several deals White House press secretary Karoline Leavitt said at the daily news briefing that similar letters to approximately five other countries would be issued on Monday. Following a now well-worn pattern, Trump plans to continue sharing the letters sent to his counterparts on social media and then mail them the documents. The letters are not negotiated settlements but Trump's own choice on rates, a sign that the closed-door talks with foreign delegations failed to produce satisfactory results for either side. Leavitt said that Trump was by setting the rates himself creating 'tailor-made trade plans for each and every country on this planet and that's what this administration continues to be focused on.' Wendy Cutler, vice president of the Asia Society Policy Institute who formerly worked in the office of the U.S. Trade Representative, said the tariff hikes on Japan and South Korea were 'unfortunate.' 'Both have been close partners on economic security matters and have a lot to offer the United States on priority matters like shipbuilding, semiconductors, critical minerals and energy cooperation,' Cutler said. 'Moreover, companies from both countries have made significant manufacturing investments in the U.S. in recent years, bringing high-paying jobs to U.S. workers and benefiting communities all around the country.' 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%. Higher tariffs prompt market worries, more talks ahead The S&P 500 stock index was down nearly 1% in Monday afternoon trading, while the interest charged on the 10-year U.S. Treasury noted had increased to nearly 4.39%, a figure that could translate into elevated rates for mortgages and auto loans. Advertisement Trump has declared an economic emergency to unilaterally impose the taxes, suggesting they are remedies for past trade deficits even though many U.S. consumers have come to value autos, electronics and other goods from Japan and South Korea. But it's unclear what he gains strategically against China — another stated reason for the tariffs — by challenging two crucial partners in Asia who could counter China's economic heft. 'These tariffs may be modified, upward or downward, depending on our relationship with your Country,' Trump wrote in both letters. Because the new tariff rates go into effect in roughly three weeks, Trump is setting up a period of possibly tempestuous talks among the U.S. and its trade partners to reach new frameworks. Trump initially sparked hysteria in the financial markets by announcing tariff rates on dozens of countries, including 24% on Japan and 25% on South Korea. In order to calm the markets, Trump unveiled a 90-day negotiating period during which goods from most countries were taxed at a baseline 10%. The 90-day negotiating period technically ends on Wednesday, even as multiple administration officials suggested the three-week period before implementation is akin to overtime for additional talks that could change the rates. Trump plans to sign an executive order on Monday to delay the official tariff increases until Aug. 1, Leavitt said. Administration officials have said Trump is relying on tariff revenues to help offset the tax cuts he signed into law on July 4, a move that could shift a greater share of the federal tax burden onto the middle class and poor as importers would likely pass along much of the cost of the tariffs. Trump has warned major retailers such as Walmart to simply 'eat' the higher costs, instead of increasing prices in ways that could intensify inflation. Advertisement Few deals have materialized so far Trump's team promised 90 deals in 90 days, but his negotiations so far have produced only two trade frameworks. His trade framework with Vietnam was clearly designed to box out China from routing its America-bound goods through that country, by doubling the 20% tariff charged on Vietnamese imports on anything traded transnationally. The quotas in the signed United Kingdom framework would spare that nation from the higher tariff rates being charged on steel, aluminum and autos, still British goods would generally face a 10% tariff. 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. The trade deficit was $24.9 billion with Malaysia, $1.3 billion with Kazakhstan, $8.9 billion with South Africa, $763 million with Laos, $577 million with Myanmar. The trade deficits are the differences between what the U.S. exports to a country relative to what it imports. According to Trump's letters, autos would be tariffed separately at the standard 25% worldwide, while steel and aluminum imports would be taxed on 50%. This is not the first time that Trump has tangled with Japan and South Korea on trade — and the new tariffs suggest his past deals made during his first term failed to deliver on his administration's own hype. In 2018 during Trump's first term, his administration celebrated a revamped trade agreement with South Korea as a major win. And in 2019, Trump signed a limited agreement with Japan on agricultural products and digital trade that at the time he called a 'huge victory for America's farmers, ranchers and growers.' Advertisement Trump has also said on social media that countries aligned with the policy goals of BRICS, an organization composed of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates, would face additional tariffs of 10%.
Miami Herald
7 hours ago
- Miami Herald
Trump announces 25% tariffs on Japan, South Korean imports
July 7 (UPI) -- President Donald Trump on Monday informed Japan and South Korea that 25% tariffs will be imposed starting Aug. 1 on most goods sent to the United States. Trump sent letters to Japanese Prime Minister Ishiba Shigeru and South Korean President Lee Jae-myung informing them of the new duties. He shared the letters on Truth Social on Monday afternoon. After the announcement, American stocks tumbled. The Dow Jones Industrial Average was down as much as 530 points, or 1.2%; the S&P 500 slumped 0.87% and the tech-dominant Nasdaq Composite was 0.9% lower. Setting record highs Thursday were the S&P at 6,279,35 and Nasdaq at 20,624.51. DJIA that day reached 44,828.53, below the record 45,014.04 on Dec. 4. U.S.-listed Japanese automakers Toyota, Nissan and Honda dropped up to 7.5%. Korea's Kia was half a percent down and Hyundai was up about 1% with cars mostly made in the United States. American companies also produce cars from other countries and import parts. The U.S. president had imposed a Wednesday deadline for nations to negotiate better trade deals. On April 2 on 'Declaration Day,' he announced 10% across-the-board baseline tariffs on 90 trading partners and harsher ones for the worst offenders. One week later, he pushed the deadline back until July 9 for the reciprocal duties. Besides Japan and South Korea, other nations are bracing for higher tariffs, including the 27 countries in the European Union. USA Today reported as many as 100 letters could go out to nations. The original reciprocal tariffs were 24% for Japan and 25% for South Korea. The letters to the Asian nations state that the 25% tariffs are separate from sector-specific duties on key product categories. 'Goods transshipped to evade a higher Tariff will be subject to that higher Tariff,' Trump said. That refers to moving goods to an interim country before their final shipment to the United States. The letters say that the higher tariffs are necessary because the other nations are taking advantage of the United States. 'Please understand this 25% number is far less than what is needed to eliminate the Trade Deficit disparity we have with your Country,' Trump wrote to both countries. In 2024, the U.S. had a $68.5 billion goods deficit with Japan and a $66 billion with South Korea, according to the Office of the United States Trade Representative. Trump also warned that the rates could be higher if they impose retaliatory duties. 'As you aware, there will be no Tariff if Korea, or companies within your Country, decide to build or manufacture product within the United States and, in fact, we will do everything possible to get approvals quickly, professionally, and routinely -- in other words, in a matter of weeks,' Trump wrote to South Korea's president. Trump on Monday threatened nations that support BRICS nations -- Brazil, Russia, India and China -- would be slapped with an additional 10% tariff. The Trump administration has been negotiating with nations. Deals have been announced with Great Britain, China and Vietnam. For Britain, there is a 10% baseline tariff on most goods but an exemption for 50% tariffs on steel and aluminum on most other countries. Instead, it is 25%. Britain was originally to be imposed only the 10% rate. U.S. tariffs on British car imports and auto parts will be reduced to 10% for 100,000 cars. In China, there is a 30% tariff on most Chinese imports, with exceptions on smartphones and computers. Originally the tariff on most goods was to be 134%. In Vietnam, imports are subject to a 10% tariff with products originating from third countries shipped to the United States in Vietnamese ports increased to 40%. The original reciprocal was 46%. Copyright 2025 UPI News Corporation. All Rights Reserved.
