President Trump has sent letters to Japan and South Korea, informing the two countries that goods imported to the U.S. will be subject to a 25% tariff, effective as of August 1. Any goods transshipped to either country will be subject to higher tariffs.
Don’t Miss TipRanks’ Half-Year Sale
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
“Please understand that the 25% number is far less than what is needed to eliminate the Trade Deficit disparity we have with your Country,” read the two letters that Trump posted on his Truth Social account. Trump added that the tariff rate could be adjusted higher or lower depending on Japan and South Korea’s relationship with the U.S.
Trump Warns of Tit-for-Tat Tariffs
If either country decides to retaliate with tariffs against the U.S., Trump will add on the retaliation tariff rate to the existing 25% tariff.
Trump explained that Japan and South Korea could avoid tariffs if they or companies within their countries “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.”
The market is taking a hit from the news, with the S&P 500 (SPX) down by 0.85% at the time of writing.
