President Donald Trump announced on Monday that the U.S. will impose a 25% tariff on all imports from Japan and South Korea, effective August 1. The levy applies to every category of goods from both countries.
On Truth Social, Trump posted screenshots of letters addressed to Japanese Prime Minister Ishiba Shigeru and South Korean President Lee Jae-myung. Each letter details a 25% tariff, separate from other levies. Goods rerouted through third countries to avoid higher charges will also face increased tariffs.
President Trump begins to attack trade partners.
The letter to Japan begins by highlighting the close trade relationship despite a persistent deficit and invites Japanese companies to take advantage of the vast U.S. domestic market.
It is noted that all imports will incur the 25% levy along with any sector tariffs. The document adds: "Goods transshipped to evade a higher tariff will be subject to that higher tariff." No tariff is offered for products made in the U.S., and approvals are promised "within weeks."
An almost identical letter was sent to South Korea. It praises the trade ties, notes the deficit, and calls for a fairer exchange. The 25% tariff will apply to all Korean goods in addition to sector tariffs. The note repeats the warning about transshipment and the duty-free offer for items made in the U.S. It adds that any increase in Korea's own tariffs will be added to the 25%.
Markets fall ahead of more trade announcements.
Stocks fell around noon on Monday following the announcements, as investors worried about the new tariffs and possible retaliation from Japan or South Korea.
The Dow fell 447 points (about 1%), the S&P 500 dropped 0.8%, and the Nasdaq slipped 0.9%. Shares of Toyota and Honda fell around 4% after the news from Trump. AMD and Nvidia dipped slightly, and Apple and Alphabet dropped just over 1%.
The latest tariffs will take effect on August 1 and will be in addition to any retaliatory levies. Treasury Secretary Scott Bessent told CNBC that more trade announcements are expected in the next 48 hours and stated that "it will be a couple of busy days."
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