Washington: President Donald Trump has officially postponed the imposition of higher tariffs on US imports while issuing letters to 14 countries, including Japan and South Korea, detailing the levies they face. This announcement comes as a 90-day pause on some of the White House’s most aggressive import taxes was set to expire.
According to BBC, the president renewed his threat of a 25% tax on products entering the country from Japan and South Korea. Additionally, he sent out letters to world leaders, warning of levies effective from August 1. Trump indicated that these rates could be adjusted, depending on diplomatic relations.
Most tariff rates mentioned in the letters align with those announced in April during his “Liberation Day” speech, where he threatened new taxes on goods from several countries. Investment strategist Vasu Menon from OCBC bank interpreted Trump’s actions as negotiating tactics rather than serious tariff threats, offering some hope to investors.
Trump defends tariffs as a strategy to protect American businesses from foreign competition and boost domestic manufacturing and jobs. However, economists warn that such measures could increase prices in the US and reduce trade. The US stock market responded negatively, with key indexes slipping and Toyota’s US-listed shares down by 4%.
Japan, which sent over $148 billion in goods to the US last year, and South Korea are among America’s top import sources. Besides these nations, Trump announced plans for significant tariffs on goods from Myanmar, Laos, Thailand, Cambodia, Serbia, Bangladesh, Indonesia, South Africa, Malaysia, and Tunisia.
Japanese Prime Minister Shigeru Ishiba expressed regret over the tariff increase while emphasizing ongoing talks with the US for mutual benefit. South Korea plans to use the extended deadline for intensified negotiations, and Thailand’s finance minister remains hopeful for a favorable agreement.
White House press secretary Karoline Leavitt mentioned that more tariff-related letters might be forthcoming, dismissing concerns that shifting deadlines may weaken Trump’s negotiating power. Treasury Secretary Scott Bessent anticipates a busy period ahead with new offers and proposals from various countries.
Despite the complex trade situation, the US has made headway with agreements involving the UK, Vietnam, and a partial deal with China. Talks with India are reportedly close to completion. The multifaceted policies have complicated trade discussions, particularly in the automotive sector with Japan and South Korea. Meanwhile, Trump has also highlighted national security concerns in sectors like steel and cars, further complicating the trade landscape.