Trump unveils first wave of steeper US tariffs in push for deals

CNA

a day ago

WASHINGTON: President Donald Trump announced tariffs of 25 per cent on Japan and South Korea on Monday (Jul 7), ramping up pressure on the two key US allies and a dozen other economies to reach trade deals with Washington.
Trump issued similar letters to a dozen other trading partners, including Indonesia, Bangladesh, Thailand, South Africa and Malaysia, saying he would slap duties on their products ranging from 25 per cent to 40 per cent.
But their starting date of Aug 1 marks a delay in Trump's reimposition of steeper levies, originally due to take effect Wednesday.
In near-identically worded letters to Japanese and South Korean leaders, Trump said the tariff hikes came as their trading relationships with Washington were "unfortunately, far from Reciprocal."
He warned of further escalation if countries retaliated against these duties.
Currently, the affected partners have been hit with a 10 per cent levy that Trump imposed on almost all trading partners.
But the president said he was ready to lower the new levels if others changed their trade policies: "We will, perhaps, consider an adjustment to this letter."
Japan's Prime Minister Shigeru Ishiba said Sunday that he "won't easily compromise" in trade talks with Washington.
White House Press Secretary Karoline Leavitt told reporters Monday that Trump would sign an order later in the day to delay his original July 9 deadline for steeper tariffs to take effect - formally postponing their imposition to Aug 1.
According to letters posted to Trump's Truth Social platform, products from Indonesia will face a 32 per cent tariff, while the level for Bangladesh is 35 per cent and Thailand, 36 per cent.
With the deadline extension, Leavitt noted that Trump would set out the "reciprocal tariff rate" for partners in the coming month as negotiations continue.
Trump originally announced sweeping tariffs on world economies during what he called "Liberation Day" on April 2, claiming the United States was being "ripped off."
Amid market turmoil, he then suspended higher tariffs affecting dozens of economies for 90 days, a deadline that would have expired Wednesday without the latest extension.
All countries receiving letters on Monday were originally slated to face these steeper duties.
While the Trump administration had signalled hopes of striking dozens of deals by July, there have been limited results so far.
Washington has unveiled pacts with only Britain and Vietnam, while the United States and China agreed to temporarily lower tariff levels on each other's products that earlier reached three-digit levels.
"CHANGE THEIR TUNE"
Asked why Trump opted to start with South Korea, Leavitt said: "It's the President's prerogative, and those are the countries he chose."
"This announcement will send a chilling message to others," said Asia Society Policy Institute Vice President Wendy Cutler, referring to Trump's initial announcements on Tokyo and Seoul.
"Both have been close partners on economic security matters," she said, adding that companies from Japan and South Korea have made "significant manufacturing investments in the US in recent years."
US Treasury Secretary Scott Bessent said Monday that there would be more deals coming up: "We are going to have several announcements in the next 48 hours."
"We've had a lot of people change their tune in terms of negotiations. So my mailbox was full last night with a lot of new offers," Bessent told CNBC.
He added that he would meet with his Chinese counterpart in the coming weeks.
Both sides have so far held high-level talks in Geneva and London. But Washington and Beijing's pause on higher tit-for-tat tariffs is due to expire in mid-August.
Major US stock indexes fell from records Monday on Trump's fresh threats. The Dow tumbled 0.9 per cent and the S&P 500 lost 0.8 per cent.
Trump has also threatened another 10 per cent tariff on countries aligning themselves with the emerging BRICS nations, accusing them of "Anti-American policies" after they slammed his duties at a summit.
But partners are still rushing to avert Trump's tariffs altogether.