Trade Alert: Trump Announces New Tariff Deadline of August 1st
President Donald Trump revealed that the U.S. will impose 25% tariffs on goods from Japan and South Korea beginning August 1. This decision marks the beginning of a new wave of tariffs aimed at countries that have yet to secure trade deals with the Trump administration. The announcement was made through a series of posts on Trump’s Truth Social platform, which included screenshots of letters sent to Japanese Prime Minister Ishiba Shigeru and South Korean President Lee Jae-myung.
The letters say, "If you wish to open your heretofore closed Trading Markets to the United States, eliminate your tariff, and Non Tariff, Policies and Trade Barriers, we will, perhaps consider an adjustment to this letter," and "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 25% that we charge..."
This move comes as part of Trump's broader push to overhaul U.S. trade policies in his second term. The new tariffs follow a 90-day reprieve that allowed both Japan and South Korea to negotiate with the administration, after which the original duties of 24% on Japan and 25% on South Korea were reduced to 10%. Despite these temporary reductions, the two nations now face an increase back to the full 25% rate, as Trump presses for better trade terms.
Other Countries Who Received Letters Include:
Trump's decision has already made waves in global markets, with U.S. stock indices experiencing a sharp drop. The Dow Jones Industrial Average fell 447 points, and both the S&P 500 and Nasdaq Composite lost ground as investors reacted to the uncertainty surrounding the tariffs. The president also warned both countries against retaliatory measures, stating that any increases in tariffs by Japan or South Korea would lead to additional U.S. tariffs being imposed.
This latest round of tariffs is framed by Trump as necessary to address persistent trade deficits with Japan and South Korea, which in 2024 amounted to $68.5 billion and $66 billion, respectively. While Trump views these deficits as evidence of unfavorable trade practices, experts have questioned whether such deficits are inherently problematic or if they can be effectively closed through tariff measures.
Trump also announced on Truth Social that he would be leveraging an additional 10% on Brics nations (Brazil, Russia, India, China, and South Africa) after they issued a joint statement expressing concern about the way a unilateral tariff would effect the global economy. Trump write that, "Any Country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% Tariff. There will be no exceptions to this policy.”
As the administration continues its push for trade deal negotiations, the coming days are likely to see more announcements of similar demands to secure new agreements. This ongoing shift in U.S. trade policy promises to have wide-reaching implications for global markets, production, and consumer demand, leaving businesses and financial institutions grappling with the unpredictable effects of tariff increases and trade uncertainty.
Constitution Partners will continue to monitor the situation and send updates as they become available.