Trump threatens to impose tariffs of 25-40 percent from August 1 unless countries make concessions on trade.
United States President Donald Trump has unveiled steep tariffs on more than a dozen countries as he ratchets up his pressure campaign aimed at winning concessions on trade.
Trump’s latest trade threats on Monday put 14 countries, including key US allies Japan and South Korea, on notice that they will face tariffs of 25 to 40 percent from August 1 unless they take more US exports and boost manufacturing in the US.
In nearly identical letters to the countries’ leaders, Trump said the US had “decided to move forward” with their relationship, but “only with more balanced, and fair, TRADE”.
Trump warned that any retaliatory taxes would be met with even higher tariffs, but left the door open to relief from the measures for countries that ease trade barriers.
“If you wish to open your heretofore closed Trading Markets to the United States, eliminate your tariff, and Non Tariff, Policies and Trade Barriers, we will, perhaps consider an adjustment to this letter,” Trump said in the letters, using capital letters to emphasise particular words.
“These Tariffs may be modified, upward or downward, depending on our relationship with your Country.”
Speaking to reporters later on Monday, Trump said the August 1 deadline was “firm” but not “100 percent firm”.
“If they call up and they say we’d like to do something a different way, we’re going to be open to that,” he said.
Trump’s steepest tariffs would apply to Laos and Myanmar, which are both facing duties of 40 percent. Japan, South Korea, Malaysia, Kazakhstan and Tunisia would be subject to the lowest rate of 25 percent.
Cambodia and Thailand are facing a 36 percent tariff rate, Serbia and Bangladesh a 35 percent rate, and South Africa and Bosnia and Herzegovina a 30 percent rate. Indonesia would be subject to a 32 percent rate.
All 14 countries, many of which have highly export-reliant economies, had previously been subject to the baseline tariff of 10 percent.
Japanese Prime Minister Shigeru Ishiba called the tariff on his country “truly regrettable”, but said the Japanese side would continue negotiations towards a mutually beneficial agreement.
South Korea’s Ministry of Trade, Industry and Energy said in a statement that it would step up negotiations ahead of the August 1 deadline to “reach a mutually beneficial negotiation result so as to swiftly address uncertainties stemming from tariffs”.
Lawrence Loh, the director of the Centre for Governance and Sustainability at the National University of Singapore Business School, said Asian countries are limited in their ability to present a united front in the face of Trump’s threats due to their varying trade profiles and geopolitical interests.
“It is not possible for these countries, even for a formal pact like ASEAN, to act in a coordinated manner. It’s likely to be to each country on its own,” Loh told Al Jazeera, referring to the 10-member Association of Southeast Asian Nations.
“That’s the trump card for Trump.”
Loh said countries in the region will feel pressure to make concessions to Trump to avoid damage to their economies.
“On balance for Asian countries, not giving concessions will turn out more harmful than playing along with the US,” he said.
“Especially for the smaller countries with less bargaining power, retaliation is out of the question.”
The US stock market dipped sharply on Trump’s latest tariff threats, with the benchmark S&P 500 falling 0.8 percent and the tech-heavy Nasdaq Composite dropping 0.9 percent.
But Asia’s major stock markets shrugged off the uncertainty, with Hong Kong’s Hang Seng Index up about 0.8 percent, South Korea’s KOSPI up about 1.4 percent, and Japan’s Nikkei 225 up about 0.2 percent as of 05:00 GMT.
While the Trump administration has ramped up pressure on its trade partners to reach deals to avoid higher tariffs, only three countries so far – China, Vietnam and the United Kingdom – have announced agreements to de-escalate trade tensions.
US Secretary of the Treasury Scott Bessent earlier on Monday teased the announcement of “several” agreements within the next 48 hours.
Bessent did not elaborate on which countries would be involved in the deals or what the agreements might entail.
White House press secretary Karoline Leavitt told a media briefing that Trump would send more letters this week and that the administration was “close” to announcing deals with other countries.
Calvin Cheng, the director of the economics and trade programme at the Institute of Strategic and International Studies (ISIS) in Kuala Lumpur, Malaysia, said that while US partners will be eager to negotiate relief from the tariffs, many governments may be resigned to higher taxes on their exports going forward.
“In my view, many will likely be under greater pressure to deploy every available institutional and political lever to address legitimate US trade concerns, particularly around tightening rules of origin and legitimate IP [intellectual property] concerns,” Cheng told Al Jazeera.
“However, there could also be a cognisance that current tariff lines are more durable than expected, so measures could shift towards targeted accommodation, while preparing domestic exporters and industries for a future of trade where a significant proportion of this tariff barrier is likely to remain.”
“My personal view is that the bulk of the current tariff rate is stickier than perhaps initially assumed,” Cheng added.
“Future concessions could be within single-digit percentage points off the average rate.”
Eduardo Araral, an associate professor at the Lee Kuan Yew School of Public Policy in Singapore, expressed a similar view.
“Unless Tokyo, Seoul and key ASEAN capitals can bundle tariff relief with credible paths on autos, agriculture, digital trade and – in some cases – security alignment before 1 August, the higher rates will likely stick, adding another layer of uncertainty to an already litigated and politically fraught tariff regime,” Araral told Al Jazeera.
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