Trump unveils 25% tariffs on South Korea and Japan, nearly identical to his ‘Liberation Day’ rates

President Trump began unveiling his “UNITED STATES TARIFF Letters” Monday with the threat of 25% duties on South Korea and Japan, two top trading partners.

The new rates — which aren’t scheduled to take effect until Aug. 1 — track closely with what the president first announced on “Liberation Day” this spring before he offered a 90-day pause that had been scheduled to expire on July 8.

Back in April, Trump announced plans for a 25% rate on South Korea and a 24% rate on Japan.

Trump posted other letters Monday afternoon to a dozen other trading partners from Malaysia (a 25% rate) to South Africa (30%) to Serbia (35%).

By and large, the rates in Monday’s letter closely tracked what Trump had promised back in April but with a few exceptions. Cambodia saw its rate drop from 49% to 36%. Laos went from a 48% rate to 40% while Myanmar saw a 4 percentage point drop to 40%.

All the letters also suggested more negotiations could be in the offing with Trump noting that if these targeted countries change their trade policies “we will, perhaps, consider an adjustment to this letter.”

Stocks sank Monday on the news falling even as the letters were paired with a delayed deadline that means none of these countries will see rate changes this week at least.

White House press secretary Karoline Leavitt confirmed Monday afternoon that Trump’s overall “reciprocal” tariff deadlines would be delayed by executive order to move the deadline for these nations and over 100 more from July 8 until Aug. 1.

Leavitt added that many other countries are set to receive letters in the coming days, saying: “Keep your eyes on Truth Social.”

A focus on South Korea and Japan

Negotiations with both South Korea and Japan are sure to continue for the next three weeks as the two nations look to avoid the tariffs coming into place, but Monday’s move from the president underlined his desire to move aggressively after country-by-country negotiations have proven slower than he had hoped.

Monday’s announcement does represent somewhat of a win for Japan, which had seen Trump threaten 35% tariffs just a few days ago in comments where he called the nation “so spoiled.”

South Korea, meanwhile, had initially been seen as a country that was near the front of the line for a deal and was even reportedly in Washington this past weekend for talks, but saw progress slow in part because of the nation’s recent elections.

If Trump does follow through with these tariffs, Paul Ashworth of Capital Economics noted Monday afternoon that a higher baseline for these two countries at least may “have a relatively modest impact on the average effective tariff rates” because of how both economies are heavily focused on goods that are subject to different sector-specific tariffs.

Ashworth calculates that Trump following through would hit about half of the exports from the two nations with key industries like autos, electronics, and pharmaceuticals subject to other Trump tariff actions and expected to sidestep these new tariffs at least.

The letters, addressed to the leaders of the nations, often offered identical language in many cases, with Trump touting both “the strength and commitment of our Trading Relationship” to South Korea and Japan while also lambasting “these longterm, and very persistent Trade Deficits” that he blamed on both countries.

“If, for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by will be added onto the 25% we charge,” Trump noted in his letters, adding that goods transshipped from another country would also face a higher rate.

Transshipment has been a key issue for Trump — and was also included in an agreement last week with Vietnam — in response to Chinese shippers often looking to the practice to avoid tariffs.

Other countries still outstanding

The total number of letters could top 100 in the coming days.

Perhaps the highest stakes shoe to drop in the coming days could be an update on where things stand with the European Union, a bloc that represents the top trading partner of the US.

The EU had previously signaled it would be willing to accept a 10% universal tariff but Trump has often promised much higher duties as a range of issues from how specific sectors like autos are treated to the continent’s digital service taxes has making negotiations slow.

A spokesperson for the European Commission said Monday it is still hoping for a deal this week but Trump has promised a 50% tariff rate if no agreement is reached.

Read more: What Trump’s tariffs mean for the economy and your wallet

Another closely watched negotiation is with India, which reportedly said it has made its final offer and said a deal is in Trump’s hands.

Monday’s announcement also comes after Trump continued to bring other issues into the trade talks, including with an overnight announcement that he planned to use a 10% tariff to dissuade nations from lining up against him through an intergovernmental organization comprising 10 countries known as BRICS.

As for the market reaction, Terry Haines of Pangaea Policy suggested that the initial market reaction could even out, especially if deals are announced later this week in addition Monday’s unilateral tariff threats.

“Quickly following this shallow dip is very likely to be multiple trade deals upside by midweek,” he wrote adding, “Watch particularly for a phase 1 US-India deal.”

This story has been updated with additional developments.

Ben Werschkul is a Washington correspondent for Yahoo Finance.

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