US President Donald Trump has initiated a new phase in the trade war he started earlier this year, informing partners—ranging from major suppliers like Japan and South Korea to smaller nations—that they will face significantly increased tariffs starting 1 August.
The announcement of a 25% levy on US importers for goods from key allies Japan and South Korea sent shockwaves through Wall Street, although markets in Asia seemed unfazed by the development.
In correspondence sent to 14 countries, Mr. Trump hinted at potential opportunities for further negotiations, all while cautioning that any retaliatory measures would elicit a similar response.
“If, for any reason, you choose to increase your tariffs, the amount added will be tacked onto the 25% we impose,” Mr. Trump stated in letters to Japan and South Korea, which were shared on his Truth Social platform.
US President Donald Trump making a trade announcement on 2 April
Countries have felt pressed to finalize agreements with the US after Mr. Trump ignited a global trade war in April, which disturbed financial markets and compelled policymakers to safeguard their economies.
Trade partners were granted another extension as Mr. Trump signed an executive order yesterday, pushing the negotiation deadline to 1 August.
Watch: Donald Trump said he has delayed the negotiating deadline to 1 August
When asked if the deadline was definite, Mr. Trump replied, “I would say it is firm, but not 100% firm. If they contact us expressing a desire to negotiate differently, we’re open to that.”
EU still seeks to achieve a trade agreement with the US
Sources within the EU disclosed that the bloc would not receive any communication outlining higher tariffs.
The EU strives to finalize a trade agreement by tomorrow, following a “good exchange” between European Commission President Ursula von der Leyen and Mr. Trump, according to a commission spokesperson.
The EU is debating whether to pursue a swift and straightforward trade deal or use its economic influence for a more advantageous outcome.
Meanwhile, Tánaiste and Minister for Foreign Affairs Simon Harris remarked that the three-week extension for trade negotiations signals that Mr. Trump “recognizes the necessity for trade”.
Prior to a Cabinet meeting, Mr. Harris expressed concerns regarding the pharmaceutical sector, noting that there is “a significant amount of work to be done”.
Minister for Agriculture Martin Heydon stated that achieving zero tariffs between the US and the EU seems improbable.
In comments to RTÉ’s Morning Ireland, he mentioned, “It might apply for certain products.”
“We have products like Irish butter, which holds the second largest market share for butter in the US—a remarkable success story—currently facing a 16% tariff,” he elaborated.
“Hence, any additional tariffs will be added on top of that, creating challenges in that sector, although we are fortunate to export to 180 countries globally.”
“We are not reliant on a single market. We continue to expand our market opportunities worldwide.”
Ibec’s Executive Director for Lobbying and Influence, Fergal O’Brien, noted that the US might “become dependent” on the revenue generated from tariffs for its economy.
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During an appearance on RTÉ’s Morning Ireland, he commented that the Irish economy has shown remarkable resilience in the past six months amid various challenges.
He stated that for most products, the depreciation of the dollar has paralleled the effects of the tariffs.
“Thus, we’ve faced a compounded impact on top of existing tariffs,” he explained.
“We need to prepare for the possibility that this situation could linger, and we must take concrete, actionable measures now to safeguard ourselves,” Mr. O’Brien added.
Mr. Trump announced that the US would impose tariffs of 25% on goods from Tunisia, Malaysia, and Kazakhstan, with rates of 30% on South Africa and Bosnia and Herzegovina. Tariffs will reach 32% on Indonesia, 35% on Serbia and Bangladesh, 36% on Cambodia and Thailand, and 40% on Laos and Myanmar.
A deal with India is reportedly close, Mr. Trump mentioned.
Japan claims progress has been made to avert higher tariffs
Japanese Prime Minister Shigeru Ishiba stated that some advancements have occurred toward avoiding the higher tariffs of up to 35% that Mr. Trump had recently suggested.
“We have received a proposal from the United States to expedite negotiations toward the newly established 1 August deadline and that, depending on Japan’s response, the content of the letter could be modified,” Mr. Ishiba told members of his cabinet.
South Korea expressed plans to intensify trade discussions with the US, interpreting Mr. Trump’s latest strategy as an effective extension of a grace period for implementing reciprocal tariffs.
Read more: How Trump’s trade war is impacting the global economy
Thailand expressed confidence in securing a competitive tariff comparable to those granted to other nations.
In Malaysia, the trade ministry acknowledged US concerns over trade imbalances and market access but believes that constructive engagement and dialogue are the best courses of action moving forward.
In Indonesia, Southeast Asia’s largest economy, a government official stated that Jakarta still has flexibility to negotiate tariffs, and its chief negotiator will meet US trade representatives in Washington.
A team from Bangladesh was also scheduled for additional trade discussions tomorrow, an official reported.
The US is the primary export market for Bangladesh’s ready-made garments industry, which constitutes over 80% of its export revenue and employs 4 million individuals.
The US is the primary export market for Bangladesh’s ready-made garments industry
“This is truly shocking news for us,” Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association, remarked: “We were genuinely hoping tariffs would range between 10-20%.”
“This will adversely affect our industry significantly.”
South African President Cyril Ramaphosa stated that the 30% tariff rate from the US is unjustified, given that 77% of US goods face no tariffs in his country.
Mr. Ramaphosa’s spokesperson noted that his government would continue to engage with the US.
Market downturn
US stocks experienced a decline in response to yesterday’s announcements, with the S&P closing roughly 0.8% lower, although Asian share markets remained largely resilient.
US Treasury Secretary Scott Bessent indicated that he anticipates several trade-related announcements within the next 48 hours, noting that his inbox is filled with last-ditch offers from various nations.
To date, only two agreements have been finalized, with the UK and Vietnam, while the US and China reached a framework regarding tariff rates in June.
China has until 12 August to finalize a deal with the White House to prevent Mr. Trump from reinstating additional import restrictions.
China has warned the US against reintroducing tariffs on its products and stated it could retaliate against countries that strike agreements with the US to exclude China from supply chains.
Mr. Trump also cautioned leaders of developing nations within the BRICS coalition meeting in Brazil, indicating that an additional 10% tariff could be enacted if they adopt “anti-American” policies.
The bloc consists of Brazil, Russia, India, and China, among others.
