Washington, D.C. – In a significant escalation of trade tensions, US President Donald Trump announced on Monday that his administration will impose a 25 per cent tariff on imports from South Korea and Japan, effective August 1, according to The Hill.
Trump disclosed the new tariff policy through letters sent to the South Korean President and the Japanese Prime Minister, and shared further details on his social media platform, Truth Social.
“Please understand this 25 per cent number is far less than what is needed to eliminate the Trade Deficit disparity we have with your Country,” Trump wrote in both letters, The Hill reported.
He also warned that if either country retaliated with increased tariffs, the United States would raise its tariffs proportionally.
In his letter to the South Korean president, Trump emphasized the benefits of local manufacturing in the United States:
“As you are aware, there will be no Tariff if Korea, or companies within your Country, decide to build or manufacture product within the United States and, in fact, we will do everything possible to get approvals quickly, professionally, and routinely – in other words, in a matter of weeks.”
A similar communication was sent to Japan’s Prime Minister, reiterating the same trade stance.
These tariffs are being viewed as an extension of the “Liberation Day” tariffs announced on April 2, under which South Korea faced a 25 per cent tariff and Japan 24 per cent. The original negotiation deadline for both nations was Wednesday, but the Monday announcements suggest an extension of that deadline with a firmer stance.
Administration officials defended the move, claiming the protectionist policies are producing positive negotiation results. However, signs of trouble remain. Analysts, including Bill Reinsch of the Center for Strategic and International Studies, have cast doubt on the progress of negotiations.
Reinsch noted that South Korean and Japanese negotiators are seeking exemptions from tariffs on steel, aluminum, and automobiles, but have not yielded on any of the key issues.
“Negotiations are not going well,” Reinsch warned last week.
So far, the US has concluded only two trade deals—one with the United Kingdom, which received mixed reviews from American industry, and another with Vietnam, though details of the latter remain limited.
Market reaction has been volatile. While stocks soared after the initial tariff announcement on April 2, they fell on Monday following confirmation of the 25% rate. The Dow Jones Industrial Average dropped by more than 1.2%, while the S&P 500 slid by nearly 1%, highlighting investor unease over the growing trade conflict.
The Federal Reserve was also reportedly surprised by the scale of the tariffs initially announced in April, adding further uncertainty to the economic landscape.