Key Points
- President Trump is imposing new, higher tariffs on 14 U.S. trade partners, including key allies. The new tariffs are set to take effect on August 1.
- Japan and South Korea will face a flat 25% tariff on all goods they export to the U.S.
- Wall Street reacted negatively, with the S&P 500 falling and auto stocks taking a significant hit.
- Affected countries are rushing to negotiate a deal before the deadline, but the White House is taking a hardline stance.
President Donald Trump escalated his global trade war on Monday, formally notifying key U.S. allies, such as Japan and South Korea, that they will face sharply higher tariffs on all their goods starting August 1. The move rattled Wall Street and put immense pressure on countries to finalize trade deals before the new deadline.
In letters sent to 14 countries, Trump laid out the new tariff rates, including a 25% levy on all imports from Japan and South Korea. The news sent the S&P 500 index plummeting, with shares of Japanese automakers such as Toyota and Honda taking a significant hit.
While extending the negotiation deadline to August 1, Trump warned that any country retaliating with tariffs will face an additional amount on top of the new U.S. rates. This “take it or leave it” approach has left many nations scrambling.
Japan and South Korea both responded by saying they would intensify negotiations in the hopes of reaching a deal to avoid the damaging tariffs. South Africa, which was hit with a 30% rate, called the move unjustified.
Other countries facing new tariffs include Thailand, Indonesia, and Serbia, with rates ranging from 25% to 40%. The European Union appears to have been spared from this round and is reportedly still trying to negotiate a separate agreement. Trump has so far only secured full trade deals with the United Kingdom and Vietnam, leaving much of the world in a state of uncertainty.
