US President Donald Trump on Monday announced 25 per cent tariffs on imports from South Korea and Japan. The tariff slabs will come into effect from August 1, Trump announced on his Truth Social platform, rolling out letters with Korea and Japan being among the first ones to receive them. Any goods that are transshipped through those countries to evade higher tariffs will face higher duties based on the country of origin. Japan faced a 24% tariff rate in April before the tariff pause, while South Korea had a 25% tariff rate applied to its goods.
Trump claimed “long-term, and very persistent” trade deficits were the basis for reordering the trade relationships. Trump shared the screenshots of the letters he dispatched to Japanese Prime Minister Ishiba Shigeru and South Korean President Lee Jae-myung appraising them of his move to impose the new set of tariff rates. Trump also threatened that if either country raises its tariffs on US goods, the US will retaliate by raising tariffs by the same amount.
Here is where things stand with various other partners:
China: The US has eased export restrictions on China for chip design software and ethane, a sign that trade tensions are calming between the two countries after they agreed to a framework to move toward a larger trade deal.
Vietnam: Trump said he had reached a trade deal with Vietnam, one that will see the country’s imports face a 20% tariff — lower than the 46% he had threatened in April. He also said Vietnamese goods would face a higher 40% tariff “on any transshipping” — when goods shipped from Vietnam originate from another country, like China.
European Union: The EU has signalled it is willing to accept a 10% universal tariff on many of its exports, but is seeking exemptions for sectors.
Canada: Canada has scrapped its digital services tax that was set to affect large US technology companies. The White House said trade talks between the two countries had resumed, with a deal by mid-July in focus.
