Washington, DC [US], July 8 : US President Donald Trump announced on Monday that his administration would impose a 25 per cent tariff on imports from South Korea and Japan, effective August 1, The Hill reported.
Trump has shared details regarding expected tariff rates in letters to the South Korean President and the Japanese Prime Minister. He shared details regarding tariffs on his social media platform, Truth Social, as well. Previously, Trump indicated he would send letters to several nations on Monday.
"Please understand this 25 per cent number is far less than what is needed to eliminate the Trade Deficit disparity we have with your Country," Trump wrote to the two nations, The Hill reported.
Trump warned that if either nation increased its tariffs in response, the US would raise its tariffs by the same amount.
In a letter to his South Korean counterpart, Trump wrote, "As you are aware, there will be no Tariff if Korea, or companies within your Country, decide to build or manufacture product within the United States and, in fact, we will do everything possible to get approvals quickly, professionally, and routinely - in other words, in a matter of weeks."
He also shared details regarding tariffs with Japan's PM.
Under the "Liberation Day" tariffs announced on April 2, South Korea was subject to a 25 per cent tariff and Japan was hit with a 24 per cent tariff. So, announcements made on Monday amount to an extension of the negotiation deadline, which was scheduled for Wednesday.
Administration officials have stressed that tariffs and the new protectionist US trade posture are delivering results in the negotiating room. However, the extended deadline and raised rate of tariffs indicate that things may not be going as smoothly as hoped.
Last week, Bill Reinsch, head of the international business program at the Center for Strategic and International Studies, said that he did not believe negotiations were going well.
He said that negotiators of Japan and South Korea have called for exemptions from tariffs on steel, aluminium and automobiles. He said South Korean negotiators had demanded exemptions from all the tariffs and that they had not conceded on those points.
So far, the US has only announced two trade deals, one with the United Kingdom, which received mixed results from the US industry. The US has made another deal with Vietnam, the details of which are scarce, The Hill reported.
Securities markets hit new highs after tanking on the news of the tariffs announced on April 2, which were larger than many analysts had been expecting and the Federal Reserve were also surprised by the announcement, as per the report.
Stocks witnessed a drop on Monday. The Dow Jones Industrial Average of big US companies witnessed a drop of more than 1.2 per cent in early afternoon trading, and the S&P 500 was down nearly a per cent.
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