United States President Donald Trump is set to impose 25 p.c tariffs on two key US allies, Japan and South Korea, starting on August 1 because the administration’s self-imposed deadline for commerce agreements of July 9 nears and not using a deal in place.
On Monday, the Trump administration stated this within the first of 12 letters to key US commerce companions relating to the brand new levies they face.
In near-identically worded letters to the Japanese and South Korean leaders, the US president stated the commerce relationship was “sadly, removed from Reciprocal”.
Japan’s Prime Minister Shigeru Ishiba has stated that he “gained’t simply compromise” in commerce talks with the Trump administration.
The US imports practically twice as a lot from Japan because it exports to the nation, in accordance with US Census Bureau information.
At present, each Japan and South Korea have a ten p.c levy in place, the identical as nearly all US buying and selling companions. However Trump stated he was able to decrease the brand new ranges if the 2 international locations modified their commerce insurance policies.
“We’ll, maybe, take into account an adjustment to this letter,” he stated in letters to the 2 Asian international locations’ leaders that he posted on his Reality Social platform. “If for any motive you resolve to boost your Tariffs, then, regardless of the quantity you select to boost them by, might be added onto the 25% that we cost.”
Trump additionally introduced the US will impose 25 p.c tariffs every on Malaysia and Kazakhstan, 30 p.c on South Africa and 40 p.c every on Laos and Myanmar.
US Treasury Secretary Scott Bessent stated earlier on Monday that he anticipated a number of commerce bulletins to be made within the subsequent 48 hours, including that his inbox was filled with last-ditch gives from international locations to clinch a tariff deal by the deadline. Bessent didn’t say which international locations might get offers and what they could include.
In April, the White Home stated it could have 90 commerce and tariff offers established inside 90 days. That didn’t occur, and since that point, the administration has solidified two agreements — one with Vietnam, and the opposite with the UK.
“There might be extra letters within the coming days,” White Home Press Secretary Karoline Leavitt stated, including that “we’re shut” on some offers. She stated Trump would signal an govt order on Monday formally delaying the July 9 deadline to August 1.
BRICS tensions
Trump additionally put members of the growing nations’ BRICS group in his sights as its leaders met in Brazil, threatening an extra 10 p.c tariff on any BRICS international locations aligning themselves with “anti-American” insurance policies.
The brand new 10 p.c tariff might be imposed on particular person international locations in the event that they take anti-American coverage actions, a supply conversant in the matter advised Reuters information company.
The BRICS group includes Brazil, Russia, India and China and South Africa together with latest joiners Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates. Trump’s feedback hit the South African rand, affecting its worth in Monday buying and selling.
Russia stated BRICS was “a gaggle of nations that share widespread approaches and a typical world view on cooperate, based mostly on their very own pursuits”.
“And this cooperation inside BRICS has by no means been and can by no means be directed in opposition to any third international locations,” stated Kremlin spokesman Dmitry Peskov.
European Union on the desk
The European Union is not going to be receiving a letter setting out larger tariffs, EU sources conversant in the matter advised Reuters on Monday.
The EU nonetheless goals to achieve a commerce deal by July 9 after European Fee President Ursula von der Leyen and Trump had a “good trade”, a fee spokesperson stated.
It was not clear, nevertheless, whether or not there had been a significant breakthrough in talks to stave off tariff hikes on the biggest buying and selling companion of the US.
Including to the strain, Trump threatened to impose a 17 p.c tariff on EU meals and agriculture exports, it emerged final week.
The EU has been torn over whether or not to push for a fast and light-weight commerce deal or again its personal financial clout in making an attempt to barter a greater consequence. It had already dropped hopes for a complete commerce settlement earlier than the July deadline.
“We need to attain a cope with the US. We need to keep away from tariffs,” the spokesperson stated at a day by day briefing.
And not using a preliminary settlement, broad US tariffs on most imports would rise from their present 10 p.c to the charges set out by Trump on April 2. Within the EU’s case, that may be 20 p.c.
Von der Leyen additionally held talks with the leaders of Germany, France and Italy on the weekend, Germany stated. German Chancellor Friedrich Merz has repeatedly careworn the necessity for a fast deal to guard industries weak to tariffs starting from vehicles to prescription drugs.
Germany stated the events ought to permit themselves “one other 24 or 48 hours to make a decision”. And the nation’s auto firm Mercedes-Benz stated on Monday its second-quarter unit gross sales of vehicles and vans had fallen 9 p.c, blaming tariffs.
Markets reply
US markets have tumbled on Trump’s tariff bulletins.
As of three:30pm in New York (19:30 GMT), the S&P 500 fell by 1 p.c, marking the largest drop in three weeks. The tech-heavy Nasdaq Composite Index was down by a bit of greater than 1 p.c, whereas the Dow Jones Industrial Common additionally fell by greater than a full share level.
US-listed shares of Japanese automotive corporations fell, with Toyota Motor Corp down 4.1 p.c in mid-afternoon buying and selling and Honda Motor off by 3.8 p.c. In the meantime, the US greenback surged in opposition to each the Japanese yen and the South Korean gained.
