Trump unveils 25% tariffs on goods from Japan, South Korea in letters to leaders

Daily Maverick

5 days ago

12 more letters expected
White House says Trump to sign executive order extending deadline
New tariffs rates to go into effect on August 1
Stocks add to day's losses on tariff news
Treasury secretary says inbox full of trade offers
Trump and EU Commission chief also held call on Sunday
Trump threatens BRICS countries with additional tariffs
By Jeff Mason, Bart H. Meijer and Andrea Shalal
'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 said in letters to the leaders of the two Asian countries, which he posted on his Truth Social platform.
Later, Trump also announced the U.S. will impose 25% tariffs on Malaysia and Kazakhstan, 30% on South Africa and 40% on Laos and Myanmar.
The rate for South Korea is the same as Trump initially announced on April 2, while the rate for Japan is 1 point higher than first announced. A week later, he capped all of the so-called reciprocal tariffs at 10% until July 9 to allow for negotiations. Only two agreements have so far been reached, with Britain and Vietnam.
There was no immediate response from the Japanese or South Korean embassies on the announcement.
About12 countries will receive letters from Trump, White House spokeswoman Karoline Leavitt said at a briefing without identifying them. She said Trump would sign an executive order on Monday formally delaying the July 9 deadline to August 1.
'There will be additional letters in the coming days,' Leavitt said, adding that 'we are close' on some deals.
The European Union will not be receiving a letter setting out higher tariffs, EU sources familiar with the matter told Reuters on Monday.
U.S. stocks fell in response, the latest market ruction since Trump unleashed a global trade war on his return to office in January. His moves have repeatedly whipsawed financial markets and sent policymakers scrambling to protect their economies.
U.S. stocks were driven to near bear-market territory by his cascade of tariff announcements through the early spring but quickly rebounded to record highs in the weeks after he put the stiffest levies on hold on April 9.
The S&P 500 on Monday was down nearly 1%, its biggest drop in three weeks. U.S.-listed shares of Japanese automotive companies fell, with Toyota Motor down 4.1% at mid-afternoon trading and Honda Motor off by 3.8%. The dollar surged against both the Japanese yen and the South Korean won.
U.S. Treasury Secretary Scott Bessent said earlier on Monday he expected several trade announcements to be made in the next 48 hours, adding that his inbox was full of last-ditch offers from countries to clinch a tariff deal by the deadline.
Bessent did not say which countries could get deals and what they might contain. Trump has kept much of the world guessing on the outcome of months of talks with countries hoping to avoid the hefty tariff hikes he has threatened.
Countries have scrambled to hammer out deals before the Wednesday deadline. South Korea and Indonesia dispatched representatives to Washington, while Thailand submitted a new trade proposal offering zero tariffs on many U.S. goods.
'We've had a lot of people change their tune in terms of negotiations. So my mailbox was full last night with a lot of new offers, a lot of new proposals,' Bessent said in an interview with CNBC. 'So it's going to be a busy couple of days.'
BRICS THREAT
For its part, the European Union still aims to reach a trade deal by July 9 after European Commission President Ursula von der Leyen and Trump had a 'good exchange,' a Commission spokesperson said.
It was not clear, however, whether there had been a meaningful breakthrough in talks to stave off tariff hikes on the United States' largest trading partner.
Adding to the pressure, Trump threatened to impose a 17% tariff on EU food and agriculture exports, it emerged last week.
Trump had said on Sunday the U.S. was close to finalizing several trade pacts and would notify other countries by July 9 of higher tariff rates. He said they would not take effect until Aug. 1, a three-week reprieve.
He also put members of the developing nations' BRICS group in his sights as its leaders met in Brazil, threatening an additional 10% tariff on any BRICS countries aligning themselves with 'anti-American' policies.
The new 10% tariff will be imposed on individual countries if they take anti-American policy actions, a source familiar with the matter said.
The BRICS group comprises Brazil, Russia, India and China and South Africa along with recent joiners Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates.
Trump's comments hit the South African rand.
EU SEEKS EFFECTIVE APPROACH TO TRUMP
The EU has been torn over whether to push for a quick and light trade deal or back its own economic clout in trying to negotiate a better outcome. It had already dropped hopes for a comprehensive trade agreement before the July deadline.
'We want to reach a deal with the U.S. We want to avoid tariffs,' the spokesperson said at a daily briefing.
Without a preliminary agreement, broad U.S. tariffs on most imports would rise from their current 10% to the rates set out by Trump on April 2. In the EU's case, that would be 20%.
Von der Leyen also held talks with the leaders of Germany, France and Italy at the weekend, Germany said. Chancellor Friedrich Merz has repeatedly stressed the need for a quick deal to protect industries vulnerable to tariffs ranging from cars to pharmaceuticals.
The German spokesperson said the parties should allow themselves 'another 24 or 48 hours to come to a decision.'
Germany's Mercedes-Benz MBGn.DE said on Monday its second-quarter unit sales of cars and vans had fallen 9%, blaming tariffs.
Russia said BRICS was 'a group of countries that share common approaches and a common world view on how to cooperate, based on their own interests.'
'And this cooperation within BRICS has never been and will never be directed against any third countries,' said Kremlin spokesman Dmitry Peskov.