Washington: President Donald Trump has officially decided to delay the imposition of higher tariffs on US imports, while simultaneously notifying leaders from 14 countries, including Japan and South Korea, about the new levies they might face.
According to BBC, this decision emerges just as a 90-day suspension placed by the White House on some of its most aggressive import taxes was nearing its expiration this week. President Trump reiterated the possibility of a 25% tax on products from Japan and South Korea and issued letters to several world leaders cautioning them of levies starting from 1 August.
On Monday, Trump released letters addressed to leaders of 14 nations via social media, declaring his latest tariff plans and suggesting that the rates could be adjusted “upward or downward, depending on our relationship with your country.” These rates resemble the ones outlined during his “Liberation Day” announcement in April, where he threatened new taxes on goods from numerous countries.
This move signals potential openness to further trade discussions, as noted by Vasu Menon, an investment strategist at OCBC bank. Mr. Menon commented, “The expectations that Trump is once again engaged in a negotiating tactic, rather than making serious tariff threats, offer hope to investors.”
Trump defends the tariffs as a means to protect American businesses from foreign competition and to stimulate domestic manufacturing and job creation. However, economists argue that these measures could lead to increased prices in the US and a decline in trade. On Monday, the three main US share indexes fell, with Toyota’s US-listed shares dropping by 4%.
Japan, which exported over $148 billion in goods to the US last year, ranks as America’s fifth largest import supplier, according to US trade data. South Korea is also among the top 10. Besides these nations, Trump outlined 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, and a 30% tariff on goods from South Africa, with Malaysia and Tunisia facing a 25% tariff.
Japanese Prime Minister Shigeru Ishiba expressed regret over the US’s decision to increase tariffs and said his government would persist in seeking a mutually beneficial agreement with the US. Similarly, South Korea intends to leverage the deadline extension to intensify negotiations, while Thailand’s finance minister remains optimistic about securing a favorable tariff rate.
White House press secretary Karoline Leavitt mentioned the potential for additional letters in the coming days and dismissed claims that shifting tariff deadlines might weaken Trump’s threats. She stated, “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.”
Treasury Secretary Scott Bessent anticipates “a busy couple of days” as negotiations evolve. “We’ve had a lot of people change their tune in terms of negotiations. So my mailbox was full last night with a lot of new offers, a lot of new proposals,” he shared with CNBC.
Trump initially characterized his April tariffs as “reciprocal,” asserting they were necessary to counteract trade rules he perceived as unfair to US exports. He has also announced tariffs for key sectors like steel and cars, citing national security concerns, and threatened increases on other items such as pharmaceuticals and lumber.
These complex policies have hindered trade discussions, with automotive tariffs posing significant challenges in negotiations with Japan and South Korea. The US has reached agreements with the UK and Vietnam, alongside a partial deal with China, although these agreements have raised tariffs compared to pre-Trump administration levels, leaving key issues unresolved. A deal with India is reportedly near completion.
Recently, Trump threatened the EU with a 50% tax unless an agreement was reached, and last week, he warned Japan of a potential “30% or 35%” tariff if a deal was not struck by Wednesday.