US President Donald Trump has announced a sweeping 25% tariff on all imports from Japan and South Korea, set to take effect on August 1, 2025.
The move marks a sharp escalation in trade tensions with two of America’s closest allies.
Trump revealed the decision on his social media platform, Truth Social, posting nearly identical letters addressed to the leaders of both countries.
In the messages, he cited long-standing trade deficits and what he called “unfair practices” as reasons for the action, stressing his administration’s focus on protecting American industries.
The announcement comes just weeks before a major global trade negotiation deadline, sending shockwaves through financial markets and prompting concern among analysts and diplomats about the broader implications for international trade and geopolitical stability.
The letter by the White House stated:
“It is a Great Honour for me to send you this letter in that it demonstrates the strength and commitment of our Trading Relationship, and the fact that the United States of America has agreed to continue working with Korea, despite having a significant Trade Deficit with your great Country.”
Partnership ‘far from reciprocal’
President Trump acknowledged the strong trade relationships the US shares with Japan and South Korea, saying he hopes to continue working closely with both countries.
However, he argued that the partnerships have been “far from reciprocal,” pointing to persistent trade deficits as a key concern.
As a result, a blanket 25% tariff on all goods from Japan and South Korea will take effect on August 1, 2025. These tariffs are in addition to any existing sector-specific duties.
Trump also warned that any attempts to route goods through third countries to dodge higher tariffs would still be met with the full penalty.
To encourage companies to manufacture in the US instead, the administration pledged to fast-track approvals and make the process as smooth and professional as possible.
Trump made it clear that if either country responds by raising their own tariffs, the US will match that increase on top of the 25%.
On the other hand, he signaled a willingness to revisit the tariffs, if Japan and South Korea agree to roll back their own tariff and non-tariff barriers.
Future adjustments, he said, will depend on how the trade relationships evolve.
Wall Street move lower
US stocks dipped on Monday as investors weighed fresh developments on the global trade front. The Dow Jones Industrial Average fell by 76 points, or 0.2%. The S&P 500 slipped 0.3%, and the Nasdaq Composite declined by 0.5%.
Markets were already on edge ahead of the looming expiration of the Trump administration’s 90-day tariff reprieve, which had temporarily eased trade tensions since it was introduced in April.
Adding to investor unease, President Trump issued a fresh warning, threatening a 10% tariff on countries he said were “aligned with the anti-American policies of BRICS.” He didn’t clarify which policies he meant.
The remarks came as BRICS leaders gathered in Rio de Janeiro, where the group continued talks aimed at reducing their reliance on the US dollar.
The post Donald Trump slaps 25% tariff on Japan, South Korea; Wall Street reacts appeared first on Invezz