WASHINGTON (news agencies) — President Donald Trump on Monday placed a 25% tax on goods imported from Japan and South Korea, as well as new tariff rates on Malaysia, Kazakhstan, South Africa, Laos and Myanmar.
Trump provided notice of the tariffs to begin on Aug. 1 by posting letters on Truth Social that were addressed to the leaders of the various countries. The letters warned them to not 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,” 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 Trump on tariffs, so much as another episode in a global economic drama in which the U.S. president has placed himself at the center. His moves have raised fears that economic growth would slow to a muddle, if not make the U.S. and other nations more vulnerable to a recession. But Trump is confident that tariffs are necessary to bring back domestic manufacturing and fund the tax cuts he signed into law last Friday.
Imports from Malaysia would be taxed at 25%, Myanmar at 40%, Laos at 40%, South Africa at 30% and Kazakhstan at 25%. Trump placed the word “only” before revealing the rate in his letters to the foreign leaders, implying that he was being generous with his tariffs.
White House press secretary Karoline Leavitt said at the daily news briefing that similar letters to approximately five other countries would be issued on Monday. Following a now well-worn pattern, Trump plans to continue sharing the letters sent to his counterparts on social media and then mail them the documents.
The letters are not negotiated settlements but Trump’s own choice on rates, a sign that the closed-door talks with foreign delegations failed to produce satisfactory results for either side. Leavitt said that Trump was by setting the rates himself creating “tailor-made trade plans for each and every country on this planet and that’s what this administration continues to be focused on.”
Wendy Cutler, vice president of the Asia Society Policy Institute who formerly worked in the office of the U.S. Trade Representative, said the tariff hikes on Japan and South Korea were “unfortunate.”
“Both have been close partners on economic security matters and have a lot to offer the United States on priority matters like shipbuilding, semiconductors, critical minerals and energy cooperation,” Cutler said. “Moreover, companies from both countries have made significant manufacturing investments in the U.S. in recent years, bringing high-paying jobs to U.S. workers and benefiting communities all around the country.”
Trump still has outstanding differences on trade with the European Union and India, among other trading partners. Tougher talks with China are on a longer time horizon in which imports from that nation are being taxed at 55%.
The S&P 500 stock index was down nearly 1% in Monday afternoon trading, while the interest charged on the 10-year U.S. Treasury noted had increased to nearly 4.39%, a figure that could translate into elevated rates for mortgages and auto loans.
Trump has declared an economic emergency to unilaterally impose the taxes, suggesting they are remedies for past trade deficits even though many U.S. consumers have come to value autos, electronics and other goods from Japan and South Korea. But it’s 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,” Trump wrote in both letters.
Because the new tariff rates go into effect in roughly three weeks, Trump is setting up a period of possibly tempestuous talks among the U.S. and its trade partners to reach new frameworks.
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, Trump unveiled a 90-day negotiating period during which goods from most countries were taxed at a baseline 10%.
