According to Xinhua News Agency, U.S. President Donald Trump announced on July 7 that tariffs of 25% would be imposed on imported products from Japan and South Korea starting August 1. The White House confirmed that Trump plans to sign an executive order extending the “countervailing duty” 90-day moratorium, delaying its implementation until August 1.
Trump: Tariffs of 25% on Japan and South Korea
Earlier in the day, Trump posted a letter he wrote to Japanese Prime Minister Shinzo Abe and South Korean President Moon Jae-in on his own “Reality Social” website, stating that the new tariffs would not include tariffs on other industries.
In these two nearly identical letters, Trump wrote, “Please understand that the figure of 25% is far below the level needed to eliminate our trade deficit with your country.”
Trump warned that if Japan and South Korea respond by raising tariffs, the United States will also increase tariffs by the same amount.
Trump stated, “As you know, if companies within Japan (or South Korea) decide to build or produce products in the United States, we will not impose tariffs. In fact, we will do everything possible to approve quickly, professionally, and routinely—in other words, in just a few weeks.”
On July 7, White House spokesperson Karine Jean-Pierre displayed a letter from President Trump to Japanese Prime Minister Shinzo Abe at a press conference. (Source: Xinhua News Agency)
Trump announces tariffs on 14 countries
Apart from Japan and South Korea, Trump also successively posted letters to leaders of 12 other countries including Malaysia, Kazakhstan, South Africa, Laos, Myanmar, Tunisia, Bosnia and Herzegovina, Indonesia, Bangladesh, Serbia, Cambodia, Thailand, and more on his “Reality Social” website, explaining the reasons for taxation and stating that the new tariffs would not include tariffs on other industries.
The tariff rates for the 14 countries are as follows:
Japan, South Korea, Kazakhstan, Malaysia, Tunisia: 25%
Bangladesh, Serbia: 35%
Cambodia, Thailand: 36%
According to news reports, in these letters that are almost identical in content, Trump warned the leaders of the receiving countries that a trade deficit has constituted a significant threat to the U.S. economy and national security, necessitating change. This tariff will be independent of various industry-specific tariffs. Moreover, any attempt to circumvent this tariff through third-country transit will also be subject to higher tariffs. Trump stated that companies choosing to build factories or produce products within the United States do not need to pay this tariff. If these countries decide to increase tariffs on the U.S., the U.S. will impose an equivalent amount of tariffs on top of the existing rates.
Subsequently, Trump signed an executive order to extend the so-called “equalized tariff” moratorium, extending its implementation from July 9th to August 1st.
U.S. media: High Tariffs Will Be Burdened by American Consumers
According to data released by the U.S. Department of Commerce, last year, the U.S. imported goods worth $351 billion from seven countries where Trump issued letters. Japan and South Korea, being the sixth and seventh largest trading partners of the U.S., exported goods worth $280 billion to the U.S. last year.
U.S. media analysis suggests that raising tariffs on goods will lead to higher prices for American consumers. The main commodities imported by the U.S. from South Korea and Japan include automobiles, auto parts, semiconductors, pharmaceuticals, and machinery. The Trump administration has already imposed or threatened to impose industry-specific tariffs on many of these commodities.
Some countries are major sources of certain commodities.
For example, South Africa will face a 30% tariff, and about half of the platinum imported into the U.S. last year came from South Africa. Malaysia was the second-largest source of U.S. imports of semiconductors last year, with the U.S. purchasing semiconductors worth $18 billion from Malaysia.
The Dow Jones Industrial Average fell by 400 points upon receipt.
Following President Donald Trump’s letter to several countries on the 7th, expressing his intention to impose new tariffs on imported goods, the U.S. stock market closed lower that day.
The Dow Jones Industrial Average closed down by 422.17 points, a decrease of 0.94%, the S&P 500 index fell by 0.79%, and the Nasdaq Composite Index dropped by 0.92%.
Currently, market concerns are intensifying. Investors worry that if the trade war heats up again, the chaos of the financial market crash earlier this year could recur.
Tariff negotiations progress significantly slower than expected
For three months, the United States has been negotiating with multiple trading partners for so-called “reciprocal tariffs,” but the pace has significantly fallen short of expectations. So far, only trade agreements have been reached with the UK and Vietnam, but the details of these agreements are still being finalized, and negotiations with the EU, Japan, South Korea, India, and other parties have been challenging.
South African President Cyril Ramaphosa stated on the 7th that South Africa will continue to promote a more balanced and mutually beneficial trade relationship with the United States through diplomatic channels. South Africa noted that the U.S. government has committed to adjusting tariff rates to 30% based on the results of negotiations between the two sides.
An EU Commission spokesperson, Olaf Scholz, said on the 7th that the EU is still striving to reach a principled bilateral trade agreement with the United States before July 9th. Currently, the EU and the United States are continuing their contacts. He also mentioned that the EU is prepared for all outcomes, including retaliatory measures, but has not yet decided to initiate such a process.
European Commission President Ursula von der Leyen recently stated that if negotiations fail, the EU will firmly take retaliatory measures to protect its economy.
Japan and the United States have conducted multiple rounds of negotiations, but no breakthrough has been achieved. Japanese Prime Minister Shinzo Abe stated on the 6th that Japan is prepared for all possible tariff scenarios and will “firmly stand our ground” to defend its interests.
韩国总统李在明3日表示，与美国的谈判看起来非常困难，双方都不是十分确定“想要什么”。他说，无法确定能否在7月8日前完成谈判。
李在明同时表示，将尽最大努力与美国达成协议，并尽最大努力在谈判中取得以韩国国家利益为中心、务实共赢的结果。
印度方面宣布，已向世界贸易组织通报，计划对部分美国产品征收报复性关税，以回应美方对从印度进口的汽车及零部件加征关税的措施。
越共中央总书记苏林日前表示，建议美方尽快承认越南市场经济地位，并取消美对越部分高科技产品的出口限制。