PresidentDonald TrumpOn Monday, a tax of 25% placed on goods imported from Japan and South Korea, with reference to persistent trading balances with the two crucial American allies in Asia.
Trump provided the rates to start on 1 August by placing letters about the truth of the truth that were addressed to the leaders of both countries. The letters warned both countries not to take revenge by increasing their own import tax, otherwise the Trump administration would further increase the rates.
“If, for whatever reason, you decide to increase your rates, then the number you choose to lift them up will be added to the 25% we charge,” Trump wrote in the letters to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Myung.
The letters were not the last word of Trump at rates, as much as another episode in a worldwide economic drama in which the American president has placed himself in the center. His movements have increased the fear that economic growth will slow down to a confusion, if not the US and other countries make a recession more vulnerable. But Trump is convinced that rates are needed to reduce domestic production and to finance the tax cuts that he signed in the law last Friday.
The S&P 500 stock index had fallen almost 1% on the trade on Monday afternoon, while the interest rate charged on 10-year-old US Treasury had risen to almost 4.39%, a figure that could translate into increased rates for mortgages and car lenses.
Trump has explained an economic situation to unilaterally impose taxes, which suggests that they are remedies for earlier trade shortages, although many American consumers have started to appreciate cars, electronics and other goods from Japan and South Korea. But it is unclear what he strategically wins against China – another reason for the rates – by challenging two crucial partners in Asia that can prevent the economic weight of China.
“These rates can be changed, up or down, depending on our relationship with your country,” Trump wrote in both letters.
Because the new tariff percentages come into force in about three weeks, Trump is set up a period of potentially stormy conversations under the US and trading partners to reach new frameworks.
Trump initially led to hysteria in the financial markets by announcing tariff rates in dozens of countries, including 24% on Japan and 25% in South Korea. To calm the markets, Trump revealed a 90 -day negotiation period in which goods from most countries were charged with a start of 10%.
The 90-day negotiation period ends technically before Wednesday, even if several administration officers and Trump themselves have proposed the three-week period before the implementation is related to overtime for extra conversations.
Administration officials have said that Trump relies on tariff income to compensate for the tax cuts he signed in the law on July 4, a movement that could shift a larger part of the federal tax burden to the middle class and the poor would probably pass on much of the costs of the rates. Trump has warned large retailers such as Walmart to easily ‘eat’ the higher costs, instead of increasing prices in ways that can intensify inflation.
Trump’s team promised 90 deals in 90 days, but his negotiations so far have only delivered two trading frames.
His commercial framework with Vietnam was clearly designed to add China to roll his America -related goods through that country, by doubling the 20% rate that in Vietnamese imports were being charged with everything that is traded transnationally.
The quota in the Framework of the United Kingdom would save that nation from the higher rate rates that are charged on steel, aluminum and cars, still British goods would generally be confronted with a rate of 10%.
According to the Census Bureau, the United States ran a $ 69.4 billion trade in goods with Japan with Japan and an imbalance of $ 66 billion with South Korea in 2024.
According to Trump’s letters, cars worldwide would be separated on the standard 25% worldwide, while the steel and aluminum input would be taxed at 50%. The wider 25% rates on Japan and South Korea would apply to goods that do not yet fall under the specific sectoral rates.
This is not the first time that Trump has put Japan and Zuid -Korea on trade – and the new rates suggest that his earlier deals had not played his own hype of his administration during his first term.
In 2018, during Trump’s first term, his administration celebrated a renewed trade agreement with South Korea as a big win. And in 2019, Trump signed a limited agreement with Japan about agricultural products and digital trade that he then called a “huge victory for American farmers, farmers and growers”.
—Josh Boak, Associated Press
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