Trump threatens 25% tax on goods imported from Japan and South Korea

Leader Live

2 days ago

Mr 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% that we charge,' Mr 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 Mr Trump on tariffs, so much as another episode in a global economic drama in which the US president has placed himself at the centre.
He 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 car, electronics and other goods from Japan and South Korea.
But it is 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,' Mr Trump wrote in both letters.
Because the new tariff rates go into effect in roughly three weeks, Mr Trump is setting up a period of possibly tempestuous talks among the US and its trade partners to reach new frameworks.
Mr Trump initially sparked hysteria in the financial markets by announcing tariff rates on dozens of countries, including 24% on Japan and 25% on South Korea. In order to calm the markets, Mr Trump unveiled a 90-day negotiating period during which goods from most countries were taxed at a baseline 10%.
The 90-day negotiating period technically ends before Wednesday, even as multiple administration officials and Mr Trump himself suggested the three-week period before implementation is akin to overtime for additional talks.
He 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 on to 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 United Kingdom framework would spare that nation from the higher tariff rates being charged on steel, aluminium and autos.
The United States ran a 69.4 billion dollar trade imbalance in goods with Japan in 2024 and a 66 billion imbalance with South Korea, according to the Census Bureau.