The Trump administration's newly announced tariffs, starting August 1, 2025, will impose a 25% duty on imports from Japan and South Korea, potentially rising to 40% based on retaliation. Letters to countries like South Africa and Malaysia suggest a wider strategy of similar tariffs, signaling a move towards aggressive protectionist policies.
Mr. Trump also officially extended the timeline for dozens of other countries to agree to deals with the United States or face tariffs, signing an executive order on Monday afternoon delaying the stiff levies that were supposed to snap back on July 9.
Markets dropped as investors assessed the prospect of more trade conflict with some of America’s closest allies and largest trading partners. The S&P 500 ended Monday down 0.8 percent. Other major indexes also fell.
In nearly identical letters to the president of South Korea and the prime minister of Japan, Mr. Trump wrote that the countries would face a 25 percent tax on their exports next month, adding that “we have decided to move forward with you, but only with more balanced, and fair, TRADE.”
Despite the many trade qualms Trump has broadcast as having with the European Union, prompting him to threaten higher tariffs on several occasions, the trading bloc appears to have not received a letter from him.
“We’re not going to comment on letters that we haven’t received,” Olof Gill, a European Commission spokesperson, told reporters Monday afternoon.
“My understanding is that we can now expect an extension of the current status quo until August 1 to give further time for the EU and the US to reach an agreement in principle on a mutually beneficial agreement that works for both sides,” Simon Harris, Irish Minister for Foreign Affairs and Trade, said in a statement on Monday.
Furthermore, the administration's policy targeting countries associated with the BRICS bloc introduces an additional layer of complexity to global trade dynamics. An extra 10% tariff will be imposed on nations perceived as aligning with "Anti-American policies of BRICS," which includes major economies like China and India . Such measures could exacerbate tensions between the U.S. and these nations while undermining established multilateral trade agreements. The economic repercussions of these tariffs may lead to reduced GDP growth in the U.S., estimated at a decline of 0.8% due to anticipated foreign retaliation .
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