Trump Sends Letters to 14 Countries Threatening Tariffs

On July 7, U.S. President Donald Trump sent letters to 14 countries, including Japan, South Korea, and South Africa, threatening to impose tariffs. He also signed an executive order extending the suspension of "reciprocal tariffs" until August 1.

Over the past three months, the U.S. has been negotiating with several trading partners regarding the imposition of these so-called "reciprocal tariffs," but progress has been slower than expected. So far, only agreements have been reached with the UK and Vietnam, with the details of those agreements still to be finalized. Talks with the EU, Japan, South Korea, and India, among others, have faced significant challenges.

On July 7, President Trump announced that starting August 1, the U.S. would impose tariffs on imports from 14 countries:

* Japan, South Korea, Kazakhstan, Malaysia, Tunisia: 25%

* Bosnia and Herzegovina, South Africa: 30%

* Indonesia: 32%

* Bangladesh, Serbia: 35%

* Cambodia, Thailand: 36%

* Laos, Myanmar: 40%

(a) Trump: Additional Tariffs if Countries Raise Duties on U.S. Goods

Trump stated in letters to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae-myung, published on his platform "Truth Social," that the new tariffs would not include other sector-specific duties. In nearly identical letters, Trump wrote: "Please understand that the 25% rate is far below what would be required to eliminate the trade deficit between our two countries."

Trump warned that if Japan or South Korea responded by raising tariffs on U.S. goods, the U.S. would retaliate with a corresponding increase in tariffs.

Trump added, "As you know, if companies in Japan (South Korea) or your country decide to build or manufacture products in the U.S., we will not impose tariffs. In fact, we will do everything we can to approve this quickly, professionally, and routinely—in other words, within a few weeks."

Trump emphasized that the trade deficit has posed a significant threat to the U.S. economy and national security and must be addressed. The tariff will apply independently of other sector-specific duties. He also warned that any attempt to circumvent the tariffs via third-country transshipment would be met with higher duties. However, companies that choose to manufacture in the U.S. would be exempt from the new tariffs.

(b) Extension of "Reciprocal Tariff" Suspension to August 1

On the same day, Trump signed an executive order extending the suspension of "reciprocal tariffs," delaying implementation from July 9 to August 1.

(c) Pressure from U.S. Officials

Over the past weekend, senior U.S. officials, including Treasury Secretary Steven Mnuchin, repeatedly urged trading partners to accelerate negotiations. At the same time, they suggested that countries that have not reached agreements by August 1 could opt to extend the negotiation period.

Mnuchin, in an interview with CNN on July 6, said President Trump would send letters this week informing trading partners of the planned tariff rates. Countries that fail to reach trade agreements with the U.S. by August 1 will see the tariff rates revert to the "reciprocal tariff" levels announced in April.

Mnuchin declined to confirm if August 1 was the final deadline, stating only, "If you want to speed things up, then act."

(a) South Africa

South African President Cyril Ramaphosa, on July 7, stated that the country would continue to push for a more balanced and reciprocal trade relationship with the U.S. through diplomatic channels. South Africa noted that the U.S. government has committed to adjusting the 30% tariff rate based on the outcome of negotiations.

(b) European Union

European Commission President Ursula von der Leyen recently stated that the EU is "prepared to reach a principled agreement with the U.S. on tariffs." However, she warned that if negotiations fail, the EU will take strong retaliatory measures to protect the European economy.

(c) Japan

Japan and the U.S. have held multiple rounds of talks but have yet to make breakthroughs. Japanese Prime Minister Shigeru Ishiba stated on July 6 that Japan is prepared for all possible tariff scenarios and will "stand firm" to protect its interests.

(d) South Korea

South Korean President Lee Jae-myung said on July 3 that negotiations with the U.S. appear difficult, with both sides uncertain about "what they really want." He indicated that it is unclear whether an agreement could be reached before July 8.

He also stated that South Korea would make every effort to reach an agreement with the U.S. and would aim for a pragmatic, mutually beneficial result centered around South Korea's national interests.

(e) India

India announced that it has notified the World Trade Organization (WTO) of its plan to impose retaliatory tariffs on certain U.S. products in response to U.S. tariffs on imported automobiles and auto parts from India.

(f) Vietnam

Vietnam's Communist Party General Secretary Nguyen Phu Trong recently urged the U.S. to quickly recognize Vietnam's market economy status and remove U.S. export restrictions on high-tech products to Vietnam.

According to data from the U.S. Department of Commerce, the U.S. imported $351 billion worth of goods from the seven countries Trump sent letters to last year. Japan and South Korea, as the U.S.'s sixth and seventh largest trading partners, together exported goods worth $280 billion to the U.S. last year.

U.S. media analysis suggests that higher tariffs will result in American consumers paying higher prices. The main products imported by the U.S. from Japan and South Korea include automobiles, automotive parts, semiconductors, pharmaceuticals, and machinery. The Trump administration has already imposed or threatened to impose industry-specific tariffs on many of these products.

Some countries are key sources for specific products. For example, South Africa will face a 30% tariff, yet the U.S. imported half of its platinum from South Africa last year.

Malaysia was the second-largest source of semiconductors for the U.S., with $18 billion worth of semiconductors imported last year.

According to the Associated Press, these letters are not the final decision on tariffs but are part of another chapter in the tariff saga, raising global concerns about economic slowdown. The tariffs could lead both the U.S. and other countries into a recession. However, Trump remains confident that tariffs will revive U.S. domestic manufacturing and fund his "big and beautiful" tax plan.