President Donald Trump announced 25% tariffs on imports from Japan and South Korea effective August 1, declaring both nations’ trade relationships “far from reciprocal.” In identical letters to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae-myung, Trump warned that retaliatory tariffs would trigger further U.S. escalation: “Whatever number you choose to raise them by will be added onto the 25% we charge” . The move, part of Trump’s “Liberation Day” trade offensive, extends a 90-day negotiation window that began in April but yielded only limited deals with the UK and Vietnam.
While the original July 9 deadline passed without broad agreements, Trump delayed tariff enforcement until August 1 via executive order. Treasury Secretary Scott Bessent noted a surge in last-minute proposals, stating: “My mailbox was full with new offers”. The reprieve offers Japan and South Korea three weeks to renegotiate, though Japan’s Prime Minister Ishiba vowed not to “easily compromise”. The EU secured temporary relief, maintaining a 10% rate after Commission President Ursula von der Leyen’s “good exchange” with Trump.
Trump separately threatened a 10% surcharge on any country aligning with “anti-American policies” of the BRICS bloc (Brazil, Russia, India, China, South Africa + 5 new members), calling their critique of U.S. tariffs “hostile”. The warning followed a BRICS summit condemning “unilateral tariff measures” as destabilizing global trade. China’s Foreign Ministry countered: “Arbitrarily increasing tariffs serves no one’s interests”, while economists warned the move could fragment supply chains.
U.S. stocks fell sharply, with Toyota and Honda shares dropping 4%. The dollar surged against the yen and won. Trump cited U.S. goods deficits ($68.5B with Japan, $66B with South Korea) as justification, though experts note trade imbalances reflect macroeconomic factors, not “unfair” practices. Auto exports face an additional 25% sectoral tariff, while steel/aluminum imports endure 50% duties, hitting key Japanese and Korean industries.
Beijing avoided direct escalation, opting for diplomatic rhetoric amid its own fragile tariff truce with Washington. The U.S.-China “partial deal” reduced tariffs from 145% to 30% on select goods but expires mid-August. With Bessent set to meet Chinese counterparts soon, observers note China’s restraint contrasts with Tokyo’s defiance. a stance aligning with BRICS’ call for “multipolar” solutions to trade tensions.