tariff Illustration: Liu Rui/GT
The Trump administration has unveiled steep tariffs on more than a dozen countries including its key allies South Korea and Japan starting next month as it ramped up its pressure on its trading partners to strike trade deals with the US. The move has raised wide concerns over a potential escalation in trade tensions and broader economic fallout.
The US’ move continues its typical “maximum pressure” strategy, targeting countries such as allies and major trading partners, and reflects a unilateralist and the “America First” mindset, said a Chinese expert, noting that it will significantly raise the cost of global trade and further increase uncertainty in global supply chains including the US.
The US’ latest trade threats on Monday put 14 countries, including key US allies Japan and South Korea, on notice that they will face tariffs of 25 to 40 percent from August 1 unless they take more US exports and boost manufacturing in the US, Al Jazeera reported.
In nearly identical letters to the president of South Korea and the prime minister of Japan, President Trump wrote that the countries would face a 25 percent tax on their exports next month, adding that “we have decided to move forward with you, but only with more balanced, and fair, TRADE,” The New York Times reported.
“Please understand that the 25 percent number is far less than what is needed to eliminate the trade deficit disparity we have with your country,” he wrote.
A few hours later, the president posted several more letters to social media detailing tariff rates that products from foreign countries would face: 40 percent for exports from Myanmar and Laos, 30 percent for exports from South Africa and 25 percent for exports from Malaysia. He quickly followed with new tariff rates for Thailand, Bangladesh, Indonesia and other countries, The New York Times reported.
Trump warned that any retaliatory taxes would be met with even higher tariffs, but left the door open to relief from the measures for countries that ease trade barriers, Al Jazeera reported.
Wider responses
The latest move by the US administration has triggered widespread reactions, including from some of its allies, on Tuesday with some business representatives expressing concerns over the trade situation.
Japan’s trade deal with the US must include tariff concessions for its vital automobile industry, top trade negotiator Ryosei Akazawa said on Tuesday, after the US president announced 25 percent tariffs on goods from Japan starting August 1, Reuters reported.
Akazawa said Japan had no deadline in mind, including August 1, in reaching a deal with the US, and would not sacrifice Japan’s agriculture sector for the sake of an early agreement, the report said.
The Japanese trade negotiator also stressed that protecting the automobile sector, a mainstay of Japan’s export-reliant economy that is being slapped with 25 percent tariffs, was among his top priorities. “There’s no point striking a deal with the US without an agreement on automobile tariffs,” Akazawa said, according to the report.
In responding to the Global Times inquiry regarding the US president’s latest move of sending letters threatening major trading partners including Japan with high tariffs, Osamu Onodera, chief representative for China and Northeast Asia of the Japan External Trade Organization (JETRO), told the Global Times on Tuesday that “I hope that consultations between US and Japanese governments will lead to a successful conclusion.”
“The high tariffs raise concerns of a big impact on various industries in Japan, the US industries which rely on Japanese inputs, US consumers, as well as negative impact on the general economy,” Onodera said.
The Japanese government is to hold a task force meeting, after President Trump unveiled a letter announcing that the US will charge the country a 25 percent tariff rate starting August 1. Prime Minister Ishiba Shigeru will attend the meeting, the NHK reported.
South Korea’s Trade Ministry said early Tuesday that it will accelerate negotiations with the US to achieve a mutually beneficial deal before the 25 percent tax on its exports goes into effect, ABC News reported.
South Korea’s Trade Minister Yeo Han-koo of the Ministry of Trade, Industry and Energy, who is visiting the US to negotiate tariffs with the Trump administration, met with the US Secretary of Commerce on Monday (local time), South Korean media outlet Maeil Business Newspaper reported on Tuesday.
Commenting on the current trade situation, Soyi Park, assistant manager of the Korea International Trade Association, told the Global Times on Tuesday that “the US threat of imposing high tariffs is undoubtedly a cause for concern. It introduces a great deal of uncertainty into trade relations with key partners, including South Korea.”
“Trade is not merely the exchange of goods – it’s part of a broader strategic partnership, so such actions can negatively affect mutual trust,” Park said.
On a further note, Park said that if the proposed 25 percent tariffs are implemented, it could deliver a significant blow to South Korean exporters and the global supply chain as a whole, ultimately passing the burden on to consumers. “A negotiation-based approach that seeks mutual benefit would be far more constructive. Using trade policy as a political pressure tactic is an unfortunate and counterproductive strategy,” Park said.
South African President Cyril Ramaphosa challenged the US calculation of the new levy, saying it’s “not an accurate representation” of available trade data, given that 77 percent of US goods enter South Africa with no tariffs, Bloomberg reported.
Thai Deputy Prime Minister and Finance Minister Pichai Chunhavajira said in a post on social media platform X on Tuesday that, according to the latest letter, the US has not yet considered the country’s most recent proposal.
The Thai official noted, “We will not stop. We will keep fighting,” adding that they will seek additional measures and new solutions to ensure they have fought to the very end — to secure the best possible deal for Thailand.
Malaysia’s Ministry of Investment, Trade and Industry said in a statement on Tuesday that Malaysia will continue discussions with the US to address outstanding issues, clarify the scope and impact of the announced tariffs, and pursue avenues for the timely conclusion of negotiations.
“Malaysia views unilateral measures as potentially disruptive to business operations, supply chains, and investment flows that benefit both countries,” the ministry said.
When asked to comment on the latest broad tariff action by the Trump administration and about any update on the status of trade talks between China and the US, Mao Ning, spokesperson for China’s Ministry of Foreign Affairs, said at a regular press conference on Tuesday that China’s position on tariffs is consistent and clear.
“There are no winners in a trade war or tariff war. Protectionism hurts everyone’s interests,” Mao said, while referring the question about China-US trade talks to competent authorities.
The US has consistently prioritized its own interests and pursued an “America First” policy, often disregarding its allies – even at the expense of their interests, Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Tuesday.
Market concerns
The US move has also triggered a broad market reaction, with the stock market including the US market, slipping further amid growing concerns. On Monday, US stocks fell as the US president announced a flurry of tariffs on countries including Japan, South Korea and South Africa, CNN reported.
The Dow closed lower by 422 points, or 0.94 percent. The S&P 500 fell 0.79 percent and the tech-heavy Nasdaq Composite fell 0.92 percent. The three major indexes posted their worst day in about three weeks, the report said.
Asia-Pacific markets swung between gains and losses Tuesday as investors assessed US President’s latest tariff threats on 14 trading partners, CNBC reported.
“The capital markets have clearly expressed their dissatisfaction with the policy … This discontent may affect the financing environment for American businesses, which in turn could dampen their willingness to expand and invest,” Zhou said, noting that the resulting uncertainty may also impact other countries’ willingness to cooperate with the US, making them more cautious and concerned about potential shifts in trade policy.
Commenting on the current trade situation between the US and other countries, including its allies, Huo Jianguo, a vice chairman of the China Society for World Trade Organization Studies in Beijing, told the Global Times on Tuesday that these US trade measures add further uncertainty to an already fragile economy, which is already grappling with challenges such as high inflation, making it difficult for American companies to plan and make long-term decisions amid growing unpredictability.
This uncertainty may weaken cooperation between the US and other countries, and the broader damage could be a blow to global trade – potentially dragging down the global economy and ultimately backfiring on the US, Huo noted.