Japan, South Korea markets are muted in early trade as Trump hits trading partners with higher tariffs
Trump hit trading partners such as Malaysia (25 per cent), Indonesia (32 per cent), Cambodia and Thailand (36 per cent), as well as Laos (40%). Japan and South Korea got hit with 25% tariffs.
14 countries have been sent these letters so far, according to Reuters. Trump said these higher tariffs will take effect on Aug 1, after a three-month tariff pause that was to end on Wednesday (Jul 9).
US markets have already slumped in response earlier, with the Dow Jones Industrial Average tumbling more than 400 points, the S&P 500 falling about 0.8 per cent and the Nasdaq declining nearly 1 per cent.
Over in Asia, Japan's Nikkei 225 edged up 0.17 per cent, while South Korea's Kospi rose 0.45 per cent. Australia's ASX 200 was down 0.42 per cent.
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Straits Times
an hour ago
- Straits Times
Trump says steep copper tariffs in store as he broadens his trade war
Sign up now: Get ST's newsletters delivered to your inbox WASHINGTON/TOKYO - US President Donald Trump broadened his global trade war on July 8 as he announced a 50 per cent tariff on imported copper and said long-threatened levies on semiconductors and pharmaceuticals were coming soon. One day after he pressured 14 trading partners, including powerhouse US suppliers like South Korea and Japan, with sharply higher tariffs, Mr Trump reiterated his threat of 10 per cent tariffs on products from Brazil, India and other members of the Brics group of countries. He also said trade talks have been going well with the European Union and China, though added he is only days away from sending a tariff letter to the EU. Mr Trump's remarks, made during a White House Cabinet meeting, could inject further instability into a global economy that has been rattled by the tariffs he has imposed or threatened on imports to the world's largest consumer market. US copper futures jumped more than 10 per cent after Mr Trump's announcement of new duties on a metal that is critical to electric vehicles, military hardware, the power grid and many consumer goods. They would join duties already in place for steel, aluminum and automobile imports. US pharmaceutical stocks also slid from the day's highs following Mr Trump's threat of 200 per cent tariffs on drug imports, which he said could be delayed by about a year. Other countries, meanwhile, said they would try to soften the impact of Mr Trump's threatened duties after he pushed back a July 2 deadline to Aug 1. Mr Trump's administration promised '90 deals in 90 days' after he unveiled an array of country-specific duties in early April. Top stories Swipe. Select. Stay informed. Singapore NDP celebrations to be held at 5 heartland sites, including Bishan and Punggol, on Aug 10 Singapore Keep citizens at the centre of public service, Chan Chun Sing tells civil servants Singapore Man arrested for allegedly throwing bottle at SMRT bus, injuring passenger Asia As Trump plays tariffs hard ball, Asean has little choice but to play on Asia PM Anwar called out by his own lawmakers as Malaysia's judicial crisis heats up Singapore SIA flight from Brisbane to Singapore diverted to Perth due to technical issue Sport Speeding likely cause of Diogo Jota car crash: Police Business Great Eastern could resume trading after delisting vote fails to pass; OCBC's exit offer lapses So far only two agreements have been reached, with the United Kingdom and Vietnam. Mr Trump has said a deal with India is close. Mr Trump said countries have been clamouring to negotiate. 'It's about time the United States of America started collecting money from countries that were ripping us off... and laughing behind our back at how stupid we were,' he said. Highest levels since 1934 Following Mr Trump's announcement of higher tariffs for the 14 countries, US research group Yale Budget Lab estimated consumers face an effective US tariff rate of 17.6 per cent, up from 15.8 per cent previously and the highest since 1934. Goldman Sachs said the July 7 actions would add 1.4 percentage points to the US effective tariff rate. Mr Trump's administration has been touting those tariffs as a significant revenue source. Treasury Secretary Scott Bessent said Washington has taken in about US$100 billion (S$128 billion) so far and could reach US$300 billion by the end of the year. Global stocks showed muted reaction on July 8, as investors took in their stride the latest twist in the tariff saga. Mr Trump said he will 'probably' tell the European Union within two days what rate it can expect for it exports to the US, adding that the 27-member bloc had been treating his administration 'very nicely' in trade talks. The EU, the largest bilateral trade partner of the US, aims to strike a deal before Aug 1 with concessions for certain key export industries, such as aircraft, medical equipment and spirits, according to EU sources. Brussels is also considering an arrangement that would protect European automakers with large US production facilities. 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,' he said in the lower house of Parliament. Treasury Secretary Scott Bessent (centre) said Washington has taken in about US$100 billion (S$128 billion) so far, from the tariff measures, and could reach US$300 billion by the end of the year. PHOTO: AFP Japan, which faces a possible 25 per cent tariff, wants concessions for its large automobile industry and will not sacrifice its agriculture sector, a powerful domestic lobby, for the sake of an early deal, top trade negotiator Ryosei Akazawa said on July 8. South Korea, which also faces a possible 25 per cent tariff, said it planned to intensify trade talks over the coming weeks 'to reach a mutually beneficial result.' 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 Mr Trump said the United States would impose tariffs of 25 per cent on goods from Tunisia, Malaysia and Kazakhstan, with levies of 30 per cent on South Africa, Bosnia and Herzegovina, climbing to 32 per cent on Indonesia, 35 per cent on Serbia and Bangladesh, 36 per cent on Cambodia and Thailand and 40 per cent on Laos and Myanmar. Cambodia, hit hard by levies imposed in April, on July 8 hailed as a big success a reduction in the tariff rate from 49 per cent to 36 per cent 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 per cent of its export earnings and employs four million people. 'This is absolutely shocking news for us,' Mr Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association, told Reuters on July 8. 'We were really hoping the tariffs would be somewhere between 10-20 per cent. This will hurt our industry badly.' REUTERS
Straits Times
2 hours ago
- Straits Times
Trump's tariff deadline delay brings hope, confusion to trade partners, businesses
Sign up now: Get ST's newsletters delivered to your inbox FILE PHOTO: U.S. President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., U.S., April 2, 2025. REUTERS/Carlos Barria/File Photo WASHINGTON - U.S. President Donald Trump's latest tariff delay provided some hope to major trade partners Japan, South Korea and the European Union that deals to ease duties could still be reached, while bewildering some smaller exporters such as South Africa and leaving companies with no clarity on the path forward. Trump's form letters to 14 countries informing them of planned tariff rates of 25% to 40% provided what he called a final warning on his "reciprocal" tariffs, while pushing back Wednesday's previous deadline to August 1, a date he said on Tuesday was final, declaring: "No extensions will be granted." The move reflects Trump's frustration with trade negotiations that are proving lengthier and more complicated than the "90 deals in 90 days" that he expected, trade experts and administration officials say. The president, who announced on Tuesday a 50% tariff on imported copper and said long-threatened levies on semiconductors and pharmaceuticals were coming soon, said he has long favored simple tariffs over tedious trade talks that often involve red lines for some countries and their own requests for U.S. concessions. Japanese Prime Minister Shigeru Ishiba focused on the positive, saying his government would press ahead with negotiations toward a deal that "benefits both countries, while protecting Japan's national interest." Facing a 25% general U.S. tariff, Japan wants relief for its export-dependent auto industry from Trump's separate 25% automotive tariffs. It also has resisted demands for increased purchases of American rice. Japan, once viewed as an early favorite for a deal, faces an upper house election on July 20 and too many concessions could put Ishiba's ruling Liberal Democratic Party at risk. Top stories Swipe. Select. Stay informed. Singapore NDP celebrations to be held at 5 heartland sites, including Bishan and Punggol, on Aug 10 Singapore Keep citizens at the centre of public service, Chan Chun Sing tells civil servants Singapore Man arrested for allegedly throwing bottle at SMRT bus, injuring passenger Asia As Trump plays tariffs hard ball, Asean has little choice but to play on Asia PM Anwar called out by his own lawmakers as Malaysia's judicial crisis heats up Singapore SIA flight from Brisbane to Singapore diverted to Perth due to technical issue Sport Speeding likely cause of Diogo Jota car crash: Police Business Great Eastern could resume trading after delisting vote fails to pass; OCBC's exit offer lapses "These countries are not folding. They're not giving him what he wants, so he's added another threat," said William Reinsch, a former U.S. Commerce Department official who is a senior trade adviser at the Center for Strategic and International Studies. "He's put a new number to it and extended the deadline." South Korea, where President Lee Jae Myung has been in office less than a month, also pledged to intensify talks for "a mutually beneficial result" while analysts warned he would not be "a pushover" for Trump or put South Korea at a disadvantage to Japan. Stephen Miran, chairman of the White House's Council of Economic Advisers, told Fox News on Tuesday more deals were possible even before the end of this week, as long as countries made concessions deemed worthy by Trump. India, in particular, looked close to a deal, but prospects were less clear for smaller countries such as South Africa, Thailand and Malaysia, which face tariffs of 30%, 36% and 25%, respectively. South African President Cyril Ramaphosa pushed back on Trump's 30% tariff rate, calling it out of sync with an average 7.6% South African tariff rate. But he instructed his negotiators to "urgently engage" with Trump's team on a framework first submitted by the South African side on May 20. The Trump administration's negotiating time may be eaten up with larger partners, such as the EU, which did not get a warning letter or a change to its prescribed 20% tariff rate, double the 10% baseline. Sources familiar with the EU talks have told Reuters a deal could involve carve-outs for aircraft and parts, medical equipment and alcoholic spirits. They say the EU also wants certain automakers to export to the U.S. at rates below the 25% auto tariff. Such a deal would be similar to a framework agreement with the United Kingdom that had carve-outs for autos, steel and aircraft engines. FINAL SQUEEZE After announcing his global "Liberation Day" tariffs of 11%-50% in early April, Trump quickly dialed them back to 10% for most countries amid bond market turmoil to buy time for negotiations to lower foreign tariffs and trade barriers. Ryan Majerus, another former U.S. Commerce official, said Trump's three-month pause had not produced the desired results, and now the president was seeking to maximize his negotiating leverage. "They're going to pressure-test things and see how far they can go, particularly for countries where there hasn't been any movement in the talks," said Majerus, who is a partner at Washington's King and Spalding law firm. Steadier markets and strong economic data give Trump some room to maneuver, but time is short and "the more granular you get in negotiating these things, the tougher the sledding gets," he added. The deadline extension provides no relief to companies that are trying to keep up with Trump's tariffs. Executives say the rapidly shifting tariff landscape has paralyzed decision-making as they try to adjust their supply chains and cost structures to avoid tariff-induced price hikes. "No company can really prepare for this," said Hubertus Breier, chief technology officer for Germany's Lapp Holdings, a family-owned maker of cables, wires and robotics for factories. "We are already incurring losses simply because of the uncertainty of the daily changing situation." Lapp has difficult choices - absorb additional costs or pass them on to customers. Assuming permanently higher prices and costs, however, could threaten its long-term existence, Breier added. DeMejico, a family business in Valencia, California with a plant in Mexico that builds traditional Spanish and Mexican-style furniture, is struggling to adapt to Trump's 50% tariffs on imported steel. Robert Luna, the company's president, said the firm is importing heavy steel latches, hinges and trim parts separately to simplify the tariff calculation process and installing them at its Los Angeles-area showroom. The tariffs and higher U.S. wage costs are already inflating prices, and DeMejico faces further cost increases on furniture if Trump hits Mexico with a reciprocal tariff, Luna said. "It's hard to do anything about this as a small business owner, so I just try to be stoic and see what happens," Luna said, adding: "My biggest worry is just keeping the company alive." Luna said he thought the Trump administration was "setting up the foundation to train people to pay tariffs." REUTERS
Straits Times
4 hours ago
- Straits Times
New German chancellor set for first China visit later this year, source says
Sign up now: Get ST's newsletters delivered to your inbox German Chancellor Friedrich Merz walks on the day of the Bundestag 2025 to 2029 budget session in Berlin, Germany, July 8, 2025. REUTERS/Liesa Johannssen FRANKFURT - German Chancellor Friedrich Merz is set to make his first visit to China towards the end of this year with a delegation of top business executives, a person with direct knowledge of the matter said. The visit from the head of Europe's biggest economy and one of China's largest trading partners would be symbolically important in underpinning relations between the two, amid friction with the United States over trade tariffs. Chinese companies hope to invest more in Germany and Merz's visit could be used to repair relations after earlier tensions with Berlin, the person, who has knowledge of the preparations, told Reuters. The trip, which could come as soon as October, has yet to be finalised and details could change. A spokesperson for the German chancellery declined to comment. The Chinese foreign ministry did not immediately respond to a Reuters request for comment. It follows a visit to Berlin earlier this month by China's foreign minister, Wang Yi, on a European tour seeking to lay the groundwork for a summit between European Union and Chinese leaders later this month. German Foreign Minister Johann Wadephul said the two foreign ministers had discussed Russia's invasion of Ukraine, Taiwan and the crisis in the Middle East. China and Germany are closely interwoven, not least by German carmakers' dependence on China, the world's biggest auto market, in making and buying their cars. Relations faltered under the previous German government, where then Foreign Minister Annalena Baerbock repeatedly criticised Beijing, describing President Xi Jinping as a "dictator", and China as a rival. Points of friction remain. Germany summoned the Chinese ambassador to the foreign ministry on Tuesday after saying China's military had laser targeted a German aircraft in the Red Sea. So far, Merz has also taken a tough public line on China, while avoiding a full-blown standoff. Earlier this year, he underscored worries about China's closeness to Russia while pledging to reduce Germany's reliance on the world's second largest economy. Xi, meantime, called on Merz to deepen cooperation and jointly promote economic globalisation. REUTERS
