Trump imposes 25% tariffs on key trading partners

July 08, 2025 (MLN): U.S. President Donald Trump escalated trade tensions by revealing 25% tariffs on imports from major allies Japan and South Korea, along with a dozen other trading partners.

The move marks a significant shift in the trade war launched earlier this year, with the new levies scheduled to take effect on August 1, a delay from the initially planned implementation on Wednesday.

Trump issued similarly worded letters to countries including Indonesia, Bangladesh, Thailand, South Africa, and Malaysia, warning of tariffs ranging from 25% to 40%.

Other affected nations include Serbia, Tunisia, Kazakhstan, Bosnia and Herzegovina, Cambodia, Laos, and Myanmar.

In the letters, released via Truth Social, Trump described existing trade terms as "far from Reciprocal" and warned of further hikes if countries retaliated, as APP reported.

The president clarified that the new tariffs would not combine with previously existing sector-specific duties, meaning Japan's auto tariff remains at 25%, rather than doubling.

Trump also stated that any retaliatory tariffs would be met with proportional increases from the U.S.

The announcement rattled global markets.

The S&P 500 Index fell by 0.8%, while U.S.-listed shares of Toyota Motor and Honda Motor dropped 4% and 3.9%, respectively.

The dollar surged against both the Japanese yen and the South Korean won.

Trump's executive order formally extended the negotiation deadline to August 1, offering a final window for countries to strike trade agreements.

“I would say firm, but not 100% firm,” Trump said when asked about the flexibility of the new deadline. Japan’s Prime Minister Shigeru Ishiba confirmed receiving a U.S. proposal to proceed swiftly with trade talks.

He hinted that the tariff contents could be revised based on Japan's response.

South Korea’s Industry Ministry said the country would intensify negotiations with the U.S. to achieve a mutually beneficial outcome.

South African President Cyril Ramaphosa labeled the 30% tariff on his country's goods unjustified, noting that 77% of U.S. imports into South Africa are duty-free.

His government plans to continue engagement with Washington.

According to U.S. Treasury Secretary Scott Bessent, more trade announcements are expected within 48 hours, as multiple countries have submitted final proposals to avoid penalties.

The tariff wave has once again roiled financial markets.

Earlier in the year, Trump’s string of tariff declarations nearly drove U.S. stocks into bear-market territory, before markets rebounded following a temporary hold on the stiffest duties.

Only two countries Britain and Vietnam, have finalized agreements with the U.S. so far.

A framework was agreed with China in June.

The European Union, notably absent from the tariff letter list, remains in talks with Washington and hopes to reach a deal by Wednesday.

Meanwhile, Trump also threatened an additional 10% tariff on BRICS nations if they pursued what he termed "anti-American" policies.

The BRICS group, meeting in Brazil, includes Brazil, Russia, India, China, and others.

Despite the market turbulence, Wendy Cutler, Vice President of the Asia Society Policy Institute, noted that while the news is disappointing, there is still time for negotiation breakthroughs.

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