Trump sets 25% tariffs on Japan and South Korea, and new import taxes on 12 other nations

WASHINGTON AP President Donald Trump on Monday set a tax on goods imported from Japan and South Korea as well as new tariff rates on a dozen other nations that would go into effect on Aug Trump provided notice by posting letters on Truth Social that were addressed to the leaders of the various countries The letters warned them to not retaliate by increasing their own import taxes or else the Trump administration would further increase tariffs If for any reason you decide to raise your Tariffs then whatever the number you choose to raise them by will be added onto the that we charge Trump wrote in the letters to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae Myung The letters were not the final word from Trump on tariffs so much as another episode in a global economic drama in which he has placed himself at the center His moves have raised fears that economic expansion would slow to a trickle if not make the U S and other nations more vulnerable to a recession But Trump is confident that tariffs are necessary to bring back domestic manufacturing and fund the tax cuts he signed into law last Friday He mixed his sense of aggression with a willingness to still negotiate signaling the likelihood that the drama and uncertainty would continue and that minimal things are ever final with Trump It s all done Trump stated reporters Monday I notified you we ll make chosen deals but for the the majority part we re going to send a letter South Korea s Pact Ministry declared early Tuesday that it will accelerate negotiations with the United States to achieve a mutually beneficial deal before the tax on its exports goes into effect Japanese Prime Minister Shigeru Ishiba on Tuesday called Trump s decision extremely regrettable But Ishiba disclosed the stated tariff rate was lower than what Trump previously had threatened and would make further negotiation workable before the Aug deadline Imports from Myanmar and Laos would be taxed at Cambodia and Thailand at Serbia and Bangladesh at Indonesia at South Africa and Bosnia and Herzegovina at and Kazakhstan Malaysia and Tunisia at Trump placed the word only before revealing the rate in his letters to the foreign leaders implying that he was being generous with his tariffs But the letters generally followed a standard format so much so that the one to Bosnia and Herzegovina initially addressed its woman leader eljka Cvijanovi as Mr President Trump later posted a corrected letter Exchange talks have yet to deliver several deals White House press secretary Karoline Leavitt reported Trump by setting the rates himself was creating tailor-made pact plans for each and every country on this planet and that s what this administration continues to be focused on Following a now well-worn pattern Trump plans to continue sharing the letters sent to his counterparts on social media and then mailing them the documents a stark departure from the more formal practices of all his predecessors when negotiating commerce agreements The letters are not agreed-to settlements but Trump s own choice on rates a sign that the closed-door talks with foreign delegations failed to produce satisfactory results for either side Wendy Cutler vice president of the Asia Society Strategy Institute who formerly worked in the office of the U S Transaction Representative explained the tariff hikes on Japan and South Korea were unfortunate Both have been close partners on economic protection matters and have a lot to offer the United States on priority matters like shipbuilding semiconductors critical minerals and force cooperation Cutler commented Trump still has outstanding differences on business with the European Union and India among other trading partners Tougher talks with China are on a longer time horizon in which imports from that nation are being taxed at The office of South African President Cyril Ramaphosa commented the tariff rates publicized by Trump mischaracterized the commerce relationship with the U S but it would continue with its diplomatic efforts towards a more balanced and mutually beneficial bargain relationship with the United States after having proposed a agreement framework on May Higher tariffs prompt field worries more uncertainty ahead The S P stock index was down in Monday trading while the interest charged on -year U S Treasury notes increased to nearly a figure that could translate into elevated rates for mortgages and auto loans Trump has declared an economic urgency to unilaterally impose the taxes suggesting they are remedies for past exchange deficits even though multiple U S consumers have come to value autos electronics and other goods from Japan and South Korea The constitution grants Congress the power to levy tariffs under normal circumstances though tariffs can also consequence from executive branch investigations regarding national shield risks Trump s ability to impose tariffs through an economic crisis is under legal challenge with the administration appealing a May ruling by the U S Court of International Transaction that disclosed the president exceeded his authority It s unclear what he gains strategically against China another stated reason for the tariffs by challenging two crucial partners in Asia Japan and South Korea that could counter China s economic heft These tariffs may be modified upward or downward depending on our relationship with your Country Trump wrote in both letters Because the new tariff rates go into effect in roughly three weeks Trump is setting up a period of possibly tempestuous talks among the U S and its transaction partners to reach new frameworks I don t see a huge escalation or a walk back it s just more of the same revealed Scott Lincicome a vice president at the Cato Institute a libertarian think tank Trump initially roiled the financial markets by announcing tariff rates on dozens of countries including on Japan and on South Korea In order to calm the markets Trump unveiled a -day negotiating period during which goods from largest part countries were taxed at a baseline So far the rates in the letters sent by Trump either match his April tariffs or are generally close to them The -day negotiating period technically ends Wednesday even as multiple administration authorities suggested the three-week period before implementation is akin to overtime for additional talks that could change the rates Trump signed an executive order Monday to delay the official tariff increases until Aug Congressionally approved bargain agreements historically have sometimes taken years to negotiate because of the complexity Administration executives have declared Trump is relying on tariff revenues to help offset the tax cuts he signed into law on July a move that could shift a greater share of the federal tax burden onto the middle class and poor as importers would likely pass along much of the cost of the tariffs Trump has warned major retailers such as Walmart to just eat the higher costs instead of increasing prices in means that could intensify inflation Josh Lipsky chair of international economics at The Atlantic Council announced a three-week delay in imposing the tariffs was unlikely sufficient for meaningful talks to take place I take it as a signal that he is serious about most of of these tariffs and it s not all a negotiating posture Lipsky announced Pact gaps persist more tariff hikes are feasible Trump s gang promised deals in days but his negotiations so far have produced only two bargain frameworks His outline of a deal with Vietnam was clearly designed to box out China from routing its America-bound goods through that country by doubling the tariff charged on Vietnamese imports on anything traded transnationally The quotas in the signed United Kingdom framework would spare that nation from the higher tariff rates being charged on steel aluminum and autos though British goods would generally face a tariff The United States ran a billion contract imbalance in goods with Japan in and a billion imbalance with South Korea according to the Census Bureau The transaction deficits are the differences between what the U S exports to a country relative to what it imports According to Trump s letters autos would be tariffed separately at the standard worldwide while steel and aluminum imports would be taxed on This is not the first time Trump has tangled with Japan and South Korea on agreement and the new tariffs suggest his past deals made during his first term failed to deliver on his administration s own hype In during Trump s first term his administration celebrated a revamped business agreement with South Korea as a major win And in Trump signed a limited agreement with Japan on agricultural products and digital commerce that at the time he called a huge success for America s farmers ranchers and growers Trump has also announced on social media that countries aligned with the approach goals of BRICS an organization composed of Brazil Russia India China South Africa Egypt Ethiopia Indonesia Iran and the United Arab Emirates would face additional tariffs of