Donald Trump rolls out trade letters, announces 25% tariffs on Japan, South Korea

Hindustan Times

6 days ago

President Donald Trump on Monday began rolling out what he called 'a wave of letters' to U.S. trading partners, starting with Japan and South Korea, as he announced a 25 per cent tariff on goods imported from both countries, citing long-standing trade imbalances with the key Asian allies. US President Donald Trump begins rolling out 'a wave of letters' as he announces 25 per cent tariffs on imports from Japan and South Korea.(AP File)
Trump provided notice of the tariffs—set to take effect August 1—by posting formal letters on Truth Social addressed to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae-myung. The letters included stern warnings not to retaliate with their own levies.
'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.
The letters signalled that negotiations with Tokyo and Seoul had failed to yield results acceptable to the U.S. administration. Rather than strike deals, Trump opted to unilaterally set tariff rates—something the White House called part of a broader, customised approach.
'These tariffs may be modified, upward or downward, depending on our relationship with your Country,' Trump added in the letters.
White House press secretary Karoline Leavitt confirmed that similar trade letters would be sent to a dozen other countries later Monday. 'Twelve other countries will receive trade letters which will be posted on President Donald Trump's Truth Social platform,' she told reporters, adding that the president was 'creating tailor-made trade plans for each and every country on this planet.'
The rollout marked a new phase in Trump's aggressive trade policy, which his administration argues is designed to revive domestic manufacturing and help offset the tax cuts he signed into law on July 4. The president has declared an economic emergency to justify the tariffs, presenting them as corrective measures for years of trade deficits—though critics say the strategy risks slowing global growth and pushing the U.S. closer to recession.
The tariffs include specific sectoral measures, with autos subject to the standard 25 per cent global rate, and steel and aluminium imports facing 50 per cent duties. The broader 25 per cent tariff on Japan and South Korea will apply to other categories of goods not covered by those targeted rates.
According to U.S. Census Bureau data, the United States ran a $69.4 billion goods trade deficit with Japan in 2024 and a $66 billion deficit with South Korea.
Markets reacted quickly. The S&P 500 dropped nearly 1 per cent by Monday afternoon, while the 10-year U.S. Treasury yield rose to 4.39 per cent—raising concerns of higher costs for mortgages and auto loans.
The administration has also warned major retailers, including Walmart, against passing the increased costs on to consumers. Trump has stated that companies should 'eat' the extra charges to avoid fuelling inflation.
Trump initially rattled financial markets by announcing higher tariff rates for dozens of countries, before introducing a 90-day negotiating period during which most goods were taxed at a baseline 10 per cent. That period technically ends before Wednesday, though officials have suggested the three weeks before August 1 offer a final window for talks that could adjust the new rates.
Despite promising '90 deals in 90 days,' Trump's administration has so far delivered only two trade frameworks. A deal with Vietnam doubled the tariff on transnational goods in a move seen as an effort to block China from routing exports through that country. Meanwhile, a framework with the United Kingdom introduced quotas that spare Britain from the highest tariffs, though most British exports will still face a 10 per cent rate.
The letters posted Monday underline Trump's disappointment with previous trade deals involving Japan and South Korea. His administration had once touted a revised agreement with South Korea in 2018 as a major achievement, and in 2019, Trump called a limited agricultural and digital trade pact with Japan a 'huge victory for America's farmers, ranchers and growers.'
Separately, Trump has stated on social media that countries aligned with BRICS—including Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates—will face an additional 10 per cent tariff.
While the move is framed as a domestic economic defence, it raises strategic questions about the U.S. challenging two of its strongest regional allies at a time when countering China's growing influence in Asia remains a key priority.