Washington: President Donald Trump has opted to delay the implementation of higher tariffs on US imports while simultaneously notifying 14 countries, including Japan and South Korea, about the specific levies they will encounter.
According to BBC, this decision arrives as a 90-day pause on some of the most stringent import taxes by the White House approaches its expiration this week. President Trump reiterated his warning of a 25% tariff on goods entering the US from Japan and South Korea. Additionally, he issued letters to international leaders, indicating that new levies would commence on August 1.
Trump shared on social media that letters were dispatched to the leaders of 14 nations, informing them of his updated tariff plans. The president mentioned that these rates could be adjusted "upward or downward," contingent upon the US's diplomatic relationship with each country. Most of these tariffs mirror those outlined in his April "Liberation Day" announcement, which hinted at new taxes on imports from several nations.
Investment strategist Vasu Menon from OCBC bank suggested that Trump's comments might indicate a willingness to engage in further trade discussions. Menon noted that the president's approach might be more of a negotiating tactic rather than a solidified threat, which could provide reassurance to investors.
Trump argues that these tariffs are designed to shield American businesses from international competition and bolster domestic manufacturing and employment. However, economists predict that such measures might escalate US prices and diminish trade. The US stock market reflected this uncertainty with declines on Monday, notably a 4% drop in Toyota's US-listed shares.
Japan is a significant exporter to the US, with over $148 billion in goods sent last year, positioning it as the fifth-largest supplier of imports to the US, following the EU, Mexico, China, and Canada. South Korea also ranks within the top 10. On Monday, Trump announced 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 goods from South Africa, and a 25% tariff on goods from Malaysia and Tunisia.
Japanese Prime Minister Shigeru Ishiba expressed the intent to continue negotiations with the US for a mutually beneficial deal, deeming the additional tariffs regrettable. Similarly, South Korea plans to leverage the extension to intensify US discussions. Thailand's finance minister remains optimistic about securing a favorable tariff rate.
White House press secretary Karoline Leavitt indicated that more letters might be issued soon, countering claims that changing tariff deadlines might undermine Trump's leverage. She emphasized the high demand from global leaders eager to reach agreements with the US.
Treasury Secretary Scott Bessent anticipates a "busy couple of days," with numerous new proposals and offers flooding in. He stated that Trump's April tariffs were deemed "reciprocal," intended as a response to international trade practices perceived as unfair to US exports.
Trump has also introduced tariffs targeting key industries like steel and automobiles, citing national security, and has threatened further levies on pharmaceuticals and lumber. These complex tariff policies have complicated trade negotiations, with car tariffs being a critical point in talks with Japan and South Korea.
Thus far, the US has secured agreements with the UK, Vietnam, and a partial deal with China, though tariffs have increased compared to pre-Trump levels, leaving unresolved issues. An agreement with India is reportedly near. Recently, Trump threatened the EU with a 50% tax unless an agreement was reached. Last week, he warned Japan of a potential "30% or 35%" tariff if a deal was not finalized by Wednesday.