Trump sets 25% tariffs on Japan and South Korea, and new import taxes on
12 other nations
[July 08, 2025] By
JOSH BOAK
WASHINGTON (AP) — President Donald Trump on Monday set a 25% tax on
goods imported from Japan and South Korea, as well as new tariff rates
on a dozen other nations that would go into effect on Aug. 1.
Trump provided notice 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 he has placed
himself at the center. His moves have raised fears that economic growth
would slow to a trickle, 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.
He mixed his sense of aggression with a willingness to still negotiate,
signaling the likelihood that the drama and uncertainty would continue
and that few things are ever final with Trump.
“It’s all done," Trump told reporters Monday. “I told you we’ll make
some deals, but for the most part we’re going to send a letter.”
South Korea’s Trade Ministry said early Tuesday that it will accelerate
negotiations with the United States to achieve a mutually beneficial
deal before the 25% tax on its exports goes into effect.
Imports from Myanmar and Laos would be taxed at 40%, Cambodia and
Thailand at 36%, Serbia and Bangladesh at 35%, Indonesia at 32%, South
Africa and Bosnia and Herzegovina at 30% and Kazakhstan, Malaysia and
Tunisia 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. But the letters generally followed a standard format, so much
so that the one to Bosnia and Herzegovina initially addressed its woman
leader, Željka Cvijanović, as “Mr. President.” Trump later posted a
corrected letter.
Trade talks have yet to deliver several deals
White House press secretary Karoline Leavitt said Trump, by setting the
rates himself, was creating “tailor-made trade plans for each and every
country on this planet and that’s what this administration continues to
be focused on.”
Following a now well-worn pattern, Trump plans to continue sharing the
letters sent to his counterparts on social media and then mailing them
the documents, a stark departure from the more formal practices of all
his predecessors when negotiating trade agreements.
The letters are not agreed-to 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.
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.
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 office of South African President Cyril Ramaphosa said in a
statement that the tariff rates announced by Trump mischaracterized the
trade relationship with the U.S., but it would “continue with its
diplomatic efforts towards a more balanced and mutually beneficial trade
relationship with the United States" after having proposed a trade
framework on May 20.
Higher tariffs prompt market worries, more uncertainty ahead
The S&P 500 stock index was down 0.8% in Monday trading, while the
interest charged on 10-year U.S. Treasury notes 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. The constitution grants Congress the
power to levy tariffs under normal circumstances, though tariffs can
also result from executive branch investigations regarding national
security risks.
Trump's ability to impose tariffs through an economic emergency is under
legal challenge, with the administration appealing a May ruling by the
U.S. Court of International Trade that said the president exceeded his
authority.
[to top of second column] |
President Donald Trump meets with Israel's Prime Minister Benjamin
Netanyahu in the Blue Room of the White House, Monday, July 7, 2025,
in Washington. (AP Photo/Alex Brandon)
 It's unclear what he gains
strategically against China — another stated reason for the tariffs
— by challenging two crucial partners in Asia, Japan and South
Korea, that 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.
“I don’t see a huge escalation or a walk back — it’s just more of
the same," said Scott Lincicome, a vice president at the Cato
Institute, a libertarian think tank
Trump initially roiled 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%. So far, the rates in the letters sent by Trump
either match his April 2 tariffs or are generally close to them.
The 90-day negotiating period technically ends Wednesday, even as
multiple administration officials suggested the three-week period
before implementation is akin to overtime for additional talks that
could change the rates. Trump signed an executive order Monday to
delay the official tariff increases until Aug. 1.
Congressionally approved trade agreements historically have
sometimes taken years to negotiate because of the complexity.
Administration officials have said Trump is relying on tariff
revenues to help offset the tax cuts he signed into law on July 4, a
move that could shift a greater share of the federal tax burden onto
the middle class and poor as importers would likely pass along much
of the cost of the tariffs. Trump has warned major retailers such as
Walmart to simply “eat” the higher costs, instead of increasing
prices in ways that could intensify inflation.
Josh Lipsky, chair of international economics at The Atlantic
Council, said a three-week delay in imposing the tariffs was
unlikely sufficient for meaningful talks to take place.
“I take it as a signal that he is serious about most of these
tariffs and it’s not all a negotiating posture," Lipsky said.
Trade gaps persist, more tariff hikes are possible
Trump's team promised 90 deals in 90 days, but his negotiations so
far have produced only two trade frameworks.
His outline of a deal with Vietnam was clearly designed to box out
China from routing its America-bound goods through that country, by
doubling the 20% tariff charged on Vietnamese imports on anything
traded transnationally.
The quotas in the signed United Kingdom framework would spare that
nation from the higher tariff rates being charged on steel, aluminum
and autos, though British goods would generally face a 10% tariff.
The United States ran a $69.4 billion trade imbalance in goods with
Japan in 2024 and a $66 billion imbalance with South Korea,
according to the Census Bureau. The trade deficits are the
differences between what the U.S. exports to a country relative to
what it imports.
According to Trump's letters, autos would be tariffed separately at
the standard 25% worldwide, while steel and aluminum imports would
be taxed on 50%.
This is not the first time Trump has tangled with Japan and South
Korea on trade — and the new tariffs suggest his past deals made
during his first term failed to deliver on his administration's own
hype.
In 2018, during Trump's first term, his administration celebrated a
revamped trade agreement with South Korea as a major win. And in
2019, Trump signed a limited agreement with Japan on agricultural
products and digital trade that at the time he called a “huge
victory for America’s farmers, ranchers and growers.”
Trump has also said on social media that countries aligned with the
policy goals of BRICS, an organization composed of Brazil, Russia,
India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the
United Arab Emirates, would face additional tariffs of 10%.
___
Associated Press writer Gerald Imray in Cape Town, South Africa
contributed to this report.
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