Trump Hits Japan, South Korea With 25% Tariffs Starting August 1

President Donald Trump on Monday announced 25% tariffs on key U.S. allies and trade partners, Japan and South Korea, ahead of his July 9 deadline.

President Trump said these tariffs on Japan and South Korea will kick in from August 1 and will cover all goods imported from the two countries.

In two posts on Truth Social, President Trump shared letters to the leaders of both countries, informing them that the 25% tariff would be in addition to any sector-specific levies already imposed on both countries.

In the letters, President Trump also noted that goods transshipped to evade tariffs would be subject to the higher applicable levy. Transhipping refers to the practice of rerouting goods through another country before shipping them to the U.S. This is usually done to take advantage of lower duties applicable to the third country.

“Please understand that the 25% number is far less than what is needed to eliminate the Trade Deficit disparity we have with your Country,” President Trump said.

He also added that if Japan and South Korea retaliate by raising tariffs on the U.S., the Trump administration would counter by imposing another 25% levies on them.

This comes amid hints that the Trump administration would push back the tariff deadline from July 9 to August 1 – however, the levies on Japan and South Korea suggest that only the higher tariffs would kick in from August, while the July 9 deadline could be maintained for reaching deals.

U.S. equities declined on Monday as Wall Street reacted to President Trump’s tariff announcement.

At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.72%, while the Invesco QQQ Trust (QQQ) fell 0.68%. Stocktwits data shows retail sentiment around the S&P 500 ETF has been in the ‘bullish’ territory over the past week.

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