Washington: President Donald Trump has officially delayed the imposition of higher tariffs on US imports, while simultaneously sending letters to 14 countries, including Japan and South Korea, detailing the levies they face. This decision comes as a 90-day pause on some of the White House’s most aggressive import taxes was set to expire this week.
According to BBC, President Trump renewed his threat of a 25% tax on products entering the US from Japan and South Korea and issued a series of letters to world leaders warning of levies starting from 1 August. The president shared these letters on social media, highlighting that the rates could be adjusted “upward or downward, depending on our relationship with your country.” The tariff rates outlined in the letters were consistent with those announced in April, during his “Liberation Day” statement when he threatened new taxes on goods from numerous countries.
Investment strategist Vasu Menon from OCBC Bank noted that Trump’s comments suggested he would be open to further trade talks. “The expectations that Trump is once again engaged in a negotiating tactic, rather than making serious tariff threats, offer hope to investors,” Menon said. Trump argues that introducing tariffs will shield American businesses from foreign competition and enhance domestic manufacturing and jobs. However, economists warn that these measures may increase prices in the US and reduce trade.
Japan, which sent over $148 billion in goods to the US last year, ranks as America’s fifth-largest supplier of imports, following the European Union, Mexico, China, and Canada, according to US trade data. South Korea is also among the top ten. Besides Japan and South Korea, Trump announced plans for a 40% tariff on goods from Myanmar and Laos, a 36% tariff on goods from Thailand and Cambodia, a 35% tariff on goods from Serbia and Bangladesh, a 32% tariff on Indonesia, a 30% tariff on South Africa, and a 25% tariff on Malaysia and Tunisia.
Japanese Prime Minister Shigeru Ishiba expressed regret over the increase in tariffs and stated that his government would continue negotiations with the US to reach a mutually beneficial deal. South Korea plans to use the extension of the deadline to intensify talks with the US, while Thailand’s finance minister expressed confidence in reaching an agreement for a tariff rate similar to those imposed on other nations.
White House press secretary Karoline Leavitt mentioned that more letters might be sent in the coming days, disputing claims that shifting the tariff deadlines from 9 July to 1 August might weaken Trump’s threats. “The president’s phone, I can tell you, rings off the hook from world leaders all the time who are begging him to come to a deal,” she stated.
Treasury Secretary Scott Bessent anticipated “a busy couple of days” and noted a significant change in the tone of negotiations. Trump initially described the April tariffs as “reciprocal,” arguing they were necessary to counter trade rules he deemed unfair to US exports. He has also announced tariffs for key sectors, such as steel and cars, citing national security concerns, while threatening additional levies on pharmaceuticals and lumber.
The multi-layered tariff policies have complicated trade negotiations, with car tariffs being a major sticking point in discussions with Japan and South Korea. Thus far, the US has reached agreements with the UK, Vietnam, and a partial deal with China. However, these agreements have resulted in higher tariffs compared to pre-Trump administration levels, with some issues remaining unresolved. The US has indicated that a deal with India is nearing completion.