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Trump's moves have raised fears that economic growth would slow to a trickle, if not make the US and other nations more vulnerable to a recession. File photo

Trump announces 25 pc tariffs on Japan, South Korea; warns against retaliation

Revised tariffs on 14 countries to kick in on August 1; highest rate of 40 pc imposed on Myanmar and Lao People’s Democratic Republic


US President Donald Trump on Monday (July 7) announced that his administration would slap a 25 per cent tariff on goods imported from Japan and South Korea, while announcing new tariff rates on a dozen other nations that would go into effect on August 1.

With Trump announcing fresh tariffs on 14 countries, the highest rate of 40 per cent has been imposed on Myanmar and the Lao People’s Democratic Republic.

The new taxes were mentioned in official letters sent to leaders of the 14 countries and later shared by Trump on his social media platform Truth Social.

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Here are the revised tariffs for the 14 countries:

Bangladesh: 35 per cent

Bosnia and Herzegovina: 30 per cent

Cambodia: 36 per cent

Indonesia: 32 per cent

Japan: 25 per cent

Kazakhstan: 25 per cent

Lao People's Democratic Republic: 40 per cent

Malaysia: 25 per cent

Myanmar: 40 per cent

Republic of Serbia: 35 per cent

Republic of Tunisia: 25 per cent

South Africa: 30 per cent

South Korea: 25 per cent

Thailand: 36 per cent

Earlier last week, Trump had said that from Monday onward, he would send a batch of up to 15 letters to countries on which he plans to impose strict tariffs, but had put it on hold.

‘Don’t retaliate’, warns Trump

Trump’s letters to heads of the 14 countries also carried a warning not to retaliate by increasing their import taxes, or else his administration would further increase tariffs.

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“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 per cent that we charge,” Trump wrote in the letters to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae-myung.

With Japan and South Korea first on Trump’s list, White House press secretary Karoline Levitt, when asked the reason for the choice, said it was “the president’s prerogative.”

She also said that the US administration would soon finalise trade deals with many other countries and that Trump “wants to ensure these are the best deals possible.”

Hopes on trade deals

The letters were not the final word from Trump on tariffs, so much as another episode in a global economic drama in which he has placed himself at the centre. His moves have raised fears that economic growth would slow to a trickle, if not make the US and other nations more vulnerable to a recession. But Trump is confident that tariffs are necessary to bring back domestic manufacturing and fund the tax cuts he signed into law last Friday.

He mixed his sense of aggression with a willingness to still negotiate, signaling the likelihood that the drama and uncertainty would continue and that few things are ever final with Trump.

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Trump placed the word “only” before revealing the rate in his letters to the foreign leaders, implying that he was being generous with his tariffs.

White House press secretary Leavitt said that Trump was by setting the rates himself creating “tailor-made trade plans for each and every country on this planet and that's what this administration continues to be focused on.” Following a now well-worn pattern, Trump plans to continue sharing the letters sent to his counterparts on social media and then mail them the documents – stark departure from the more formal practices of all his predecessors when negotiating trade agreements.

Letters, not agreed-to settlements

The letters are not agreed-to settlements but Trump's own choice on rates, a sign that the closed-door talks with foreign delegations failed to produce satisfactory results for either side.

It's unclear what he gains strategically against China — another stated reason for the tariffs — by challenging two crucial partners in Asia, Japan and South Korea,that could counter China's economic heft.

“These tariffs may be modified, upward or downward, depending on our relationship with your Country,” Trump wrote in both letters.

Because the new tariff rates go into effect in roughly three weeks, Trump is setting up a period of possibly tempestuous talks among the US and its trade partners to reach new frameworks.

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The 90-day negotiating period technically ends on Wednesday, even as multiple administration officials suggested the three-week period before implementation is akin to overtime for additional talks that could change the rates. Trump plans to sign an executive order on Monday to delay the official tariff increases until August 1, Leavitt said.

(With inputs from agencies)

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