U.S. President Donald Trump has notified various governments worldwide about the upcoming tariff rates set to take effect on August 1, with Canada still under pressure to reach a deal by the July 21 deadline. Trump’s latest move involves imposing a 25% tariff on imports from Japan and South Korea, escalating the ongoing trade war initiated earlier this year.
In letters sent to 14 countries, including smaller U.S. exporters like Serbia, Thailand, and Tunisia, Trump hinted at the possibility of further negotiations while cautioning against any retaliatory actions. The President stated that any tariff increases by the recipient countries would result in an additional charge on top of the 25% already imposed.
Effective August 1, the increased tariffs will not be in conjunction with previously announced sector-specific tariffs, such as those on automobiles, steel, and aluminum. Trump also revealed plans to implement 25% tariffs on Tunisia, Malaysia, and Kazakhstan; 30% on South Africa and Bosnia; 32% on Indonesia; 35% on Bangladesh and Serbia; 36% on Cambodia and Thailand; and 40% on Laos and Myanmar.
The South Korean tariff rate remains consistent with the initial announcement made on April 2, termed “Liberation Day,” while Japan’s rate is slightly higher. Only two agreements have been reached so far with Britain and Vietnam.
South Korea expressed intentions to intensify trade talks with the U.S. leading up to August 1, aiming for mutually beneficial outcomes and advancements in key industries through a “renaissance partnership.” Japanese Prime Minister Shigeru Ishiba affirmed Japan’s commitment to negotiating a bilateral trade deal beneficial to both nations.
Trump signed an executive order delaying the July 9 deadline to August 1, emphasizing progress in ongoing negotiations. The European Union has not received notification of increased tariffs, as per sources familiar with the matter.
The announcement of new tariffs impacted the markets, with U.S. stocks experiencing a decline. The S&P 500 recorded its largest drop in three weeks, prompting fluctuations in the values of U.S.-listed Japanese automotive companies. Treasury Secretary Scott Bessent anticipates further trade announcements within the next 48 hours.
Canada, exempt from additional tariffs on “Liberation Day,” is engaged in negotiations with the U.S. toward a new security and economic partnership. Despite being spared from recent tariff increases, Canada faces challenges, including tariffs related to fentanyl, steel, aluminum, and automobiles.
The European Union is striving to finalize a trade deal by July 9, following discussions between European Commission President Ursula von der Leyen and Trump. Trump threatened to impose a 17% tariff on EU food and agriculture exports, while also targeting members of the BRICS group with potential tariffs for aligning with “anti-American” policies.