Trump Slams Japan, South Korea With 25% Tariffs From August 1
President Trump has announced a significant increase in tariffs on goods from Japan and South Korea, raising them to 25% from August 1, 2023. This decision follows failed negotiations and a warning against retaliatory tariff increases. The move has sparked market volatility, with the S&P 500 Index and Nasdaq 100 Index both falling by 0.9% and 0.8% respectively.
Japan and South Korea are substantial trading partners for the US, accounting for almost 9% of total US imports in 2022. Trump's reciprocal tariff policy, enacted in April 2025, aims to address trade imbalances. The President has warned these countries against retaliating, stating that any increase in tariffs would be added to the 25% rate.
To avoid the tariffs, Japan and South Korea have until August 1 to open their markets to American products and manufacture more within the US. Trump had previously lowered the tariffs from 24% and 25% to 10% to facilitate negotiations. However, these talks have not yielded the desired results, leading to the impending tariff hike.
Market reaction has been swift and negative. Japanese automakers' American depository receipts plummeted to session lows following Trump's announcement. The US Court of International Trade has ruled that the majority of Trump's tariffs were issued illegally, but an appeals court has temporarily allowed them to remain in place.
Trump's tariffs on Japan and South Korea are set to increase to 25% from August 1, 2023. These countries have until this date to avoid the tariffs by opening their markets to American products and manufacturing more within the US. The move is part of Trump's broader reciprocal tariff policy and is expected to generate revenue for the Treasury. However, investors are concerned about the nation's mounting debt and the potential impact on the US economy.
