U.S. President Donald Trump sent letters to governments around the world on Monday informing them of the tariff rates imposed from August 1 – although the deadline for Canada to reach a July 21 deal appears to be continuing.
Trump said he will impose a 25% tariff on imports from Japan and South Korea starting next month, a new phase of the trade war he launched earlier this year.
So far, letters sent to 14 countries – including smaller U.S. exporters such as Serbia, Thailand and Tunisia – have hinted at the opportunity to engage in additional negotiations, while warning that any retaliation measures will be reached with a similar response.
“If for any reason you decide to raise tariffs, no matter the number you choose to raise, it will be added to the 25% we charge,” Trump said in a letter to Japanese and South Korean leaders.
Higher tariffs will come into effect on August 1, especially not being combined with previously announced sectoral tariffs such as tariffs on automobiles, steel and aluminum.
Later, Trump also announced that the United States would impose 25% tariffs on Tunisia, Malaysia and Kazakhstan. 30% of South Africa and Bosnia; 32% of Indonesia; 35% of Bangladesh and Serbia; 36% of Cambodia and Thailand; and 40% of Laos and Myanmar.
South Korea's tax rates are the same as Trump's initially announced April 2, while Japan's exchange rate is higher than the initially announced. A week later, he limits all so-called reciprocity tariffs to 10% by July 9 for negotiations.
So far, only two agreements have been reached with the UK and Vietnam.
Sunday Magazine23:50Tensions in Canada's trade relations continue
South Korea said in a statement Tuesday that it will strengthen trade negotiations with the United States by August 1 to achieve mutually beneficial results and advance key industries in both countries through a “Renain Partnership.”
The Japanese Embassy did not respond immediately.
White House spokesman Karoline Leavitt said in a media briefing that Trump will officially postpone the July 9 deadline to August 1 on Monday, adding that some deals are “we are close.”
EU sources familiar with the matter told Reuters on Monday that the EU will not receive letters raising tariffs.
U.S. stocks have reacted to a decline since Trump returned to his office in January, the latest market since Trump unleashed the global trade war. His actions repeatedly whip the financial markets and send policymakers to rush to protect his economy.
In the early spring, a series of his tariff announcements were driven to near-bear territory, but it would soon rebound within weeks after putting the stiffest taxes on April 9.
Monday's S&P 500 fell nearly 1%, the biggest drop in three weeks. US listed stocks of Japanese auto companies fell, Toyota fell 4.1% in afternoon trading and Honda's stock price fell 3.8%. The dollar won a sensation against the Japanese yen and the Koreans.
U.S. Treasury Secretary Scott Bessent said earlier Monday that he hopes to make several trade announcements over the next 48 hours, adding that his inbox is filled with the last offer from the country, with an extension deadline.
Bessent didn't say which countries could make deals and what they might include. Trump has been speculating in much of the world about the outcome of a dialogue with countries that hope to avoid threatened high tariff hikes.
The state scrambles to reach an agreement by Wednesday's deadline. South Korea and Indonesia will send representatives to Washington, while Thailand has submitted a new trade proposal that provides zero tariffs on many U.S. goods.
“We have a lot of people who have changed their adjustments in negotiations. So last night my mailbox was already full of new offers, a lot of new suggestions,” Bessent said in an interview with CNBC. “So it's going to be a busy few days.”
Canada may not be affected
Canada suffered any additional pain on April 2 despite higher attacks from other countries on Liberation Day.
Canada has not been under the same pressure in the coming days due to a looming trade deal scheduled for July 9 related to tariffs, a trade deal issued by the U.S. president three months ago.
Instead, Prime Minister Mark Carney Trump agreed to negotiate a new security and economic partnership in March and has been working on it since Carney visited the White House in early May. Last month, the two leaders set July 21 as the deadline for the deal.
Prime Minister Mark Carney said on Monday that the cancellation of the digital service tax was part of a larger trade talk with the United States, although the White House said in cancelling the trade talks that Carney was “in trouble.” Talks were resumed thereafter.
However, Canada is still hit by fentanyl-related tariffs. This 25% tariff rate reduces energy and potassium fertilizer by 10%, and is only applicable to exports that are not in compliance with the Canadian-US Mexico Agreement (CUSMA).
Trump's tariffs on steel, aluminum and cars have also taken a hit.
This doesn't mean Canadians won't feel the impact of Trump's trade negotiations this week, but because high tariff rates on other countries may still indirectly undermine the global trading system and the impact of Canadians.
The EU is still working on a deal
A commission spokesman said the EU still intends to reach a trade deal on July 9 after European Commission President Ursula von der Leyen and Trump had “good exchanges”.
However, it is unclear whether a meaningful breakthrough has been made in the negotiations to avoid tariffs on the U.S.’s largest trading partner.
Under pressure, Trump threatened to impose a 17% tariff on EU food and agricultural exports, which emerged last week. Trump said on Sunday that the United States is about to complete several trade agreements and will notify other countries of higher tariff rates by July 9. He said that a three-week probation sentence would not take effect until August 1.
When its leaders met in Brazil, he also put members of the BRICS group of developing countries in the eyes of threatening 10% tariffs for any BRICS countries that are aligned with “anti-US” policies.
A source familiar with the matter said the new 10% tariff would be imposed on various countries if they pursue anti-U.S. policy lawsuits.
The BRICS Group includes Brazil, Russia, India and China and South Africa as well as recently as carpenters Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates.
