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Donald Trump has revived his threat of affecting the main commercial partners with “reciprocal” steep tariffs even when he granted a three -week respite for countries to negotiate trade agreements with the US.
The President sent letters to Japan and South Korea on Monday, both among the largest commercial counterparts in the United States, saying that the country would impose taxes of 25 percent as of August 1. South Africa would be affected with tariffs of 30 percent, Trump said, while announcing large levies in 11 other countries.
The tariffs were more or less at the same time from those Trump presented during their announcement of the “Liberation Day” on April 2, which caused serious divisions in global financial markets.
The reciprocal encumbrances, which affected dozens of countries, were arrested until July 9, in the stable markets. But since then the White House has reached only three commercial pacts, with the United Kingdom, China and Vietnam.
Trump on Monday left the door open for more agreements, saying that the letters were “more or less final offers.”
“I would say end. But if (the countries) call with a different offer, and if I like it, we will say it would say … but not 100 percent firm. If they call and say (they) would like to do something in a different way, we will be open to that.”
The United States was close to accepting a commercial agreement with India, the president added.
The White House published an executive order on Monday that said that reciprocal taxes would now be valid just after midnight on August 1. The president made the decision “based on additional information and recommendations of several senior officials, including information on the state of discussions with commercial partners,” said the order.
The global stock markets did not fade on Tuesday, with the Japan topix closing 0.2 percent and South Korea Kospi increased by 2 percent. In Europe, Stoxx Europe 600 and FTSE 100 increased 0.1 percent in early trade, while futures that track the S&P 500 increased by 0.1 percent.
Investors were “taking the opinion that nothing is definitive and that these letters simply mark another iteration on the trip to commercial agreements,” Ing analysts said.
In almost identical letters published on its Truth social platform, Trump said the commercial deficits of US goods. With the countries led on Monday, which included Indonesia, Malaysia and Thailand, were a “great threat to our economy and, in fact, our national security.”
In the letters, aimed at Shigeru Ihiba, Japan’s prime minister, and Lee Jae-Myung, president of South Korea, Trump added that if any of the countries increased their tariffs in retaliation “then, whatever the number you choose, it will be added to 25 percent we charge.”
But he said that if countries opened their markets, “we may consider an adjustment … These tariffs can be modified, up or down, depending on our relationship with their country.”
The United States already has a series of sectoral tariffs on imports from all countries, including a 25 percent rate in cars and car parts and a 50 percent rate over all imports of steel and aluminum.
An American official confirmed that the goods that were already subject to sectoral tariffs, such as vehicles and metals, would not be affected by the new rates described by Trump.
Washington also has national security probes that could lead to tariffs in a variety of other goods and industries, including aerospace, pharmaceuticals, wood, copper, fried potatoes and consumer electronics.
Trump has intensified his rhetoric against Tokyo in recent weeks, pointing to the crucial commercial partner and attacking it as “spoiled” for refusing to buy more American rice.
Tokyo has demanded a complete exemption from vehicles of 25 percent of Trump. In Tokyo, Ishiba said in televised comments on Tuesday that the tariffs threatened in the letter were “truly unfortunate.”
The commercial negotiator of Japan, Ryosei Akazawa, spoke with the United States Secretary of Commerce, Howard Lutnick, for 40 minutes on Tuesday, and the two agreed more negotiations, according to a Japanese official.
Meanwhile, US commercial conversations with South Korea were delayed by political agitation in Seoul after the accusation of former President Yoon Suk Yeol.
The Ministry of South Korea industry said Tuesday that “we will advance with negotiations to produce mutually beneficial results in the remaining time.”
Separately, the EU hoped to sign a temporary commercial agreement with the United States this week that would maintain 10 percent tariffs while the conversations continue, the Maroš šefčovič commissioner said on Monday to the Member States on Monday.
The two parties were working on the plans to reduce the 25 percent rate on vehicles, but there was no guarantee that steel taxes would be reduced from their level of 50 percent, he added, according to three people informed about discussions.
Additional Andy Bounds reports in Brussels, Kate Duguid in New York, William Sandlund in Hong Kong and Leo Lewis in Tokyo
