Trump To Put 25% Tariffs On Japan And South Korea
Trump provided notice of the tariffs to begin on August 1 by posting letters on Truth Social that were addressed to the leaders of both countries. The letters warned both countries not to 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.
The letters were not the final word from Trump on tariffs so much as another episode in a global economic drama in which the US president has placed himself at the center. Trump has declared an economic emergency to unilaterally impose the taxes, suggesting they are remedies for past trade deficits, even though many US 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 US 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 percent on Japan and 25 percent 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 percent. The 90-day negotiating period technically ends before Wednesday, even as multiple administration officials and Trump himself suggested the three-week period before implementation is akin to overtime for additional talks.
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 pass along much of the cost of the tariffs. His trade framework with Vietnam is clearly designed to box out China from routing its America-bound goods through that country, while the quotas in the UK framework would spare that nation from the higher tariff rates being charged on steel, aluminum, and autos. The US 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.
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