US President Donald Trump announced on July 7, 2025, that his administration will impose 25 percent tariffs on imports from South Korea and Japan, effective August 1.

This was communicated in official letters sent to the leaders of both countries, with Trump stating the tariffs are a response to what he described as trade relationships that are "unfortunately, far from reciprocal".

The tariffs are part of a broader strategy targeting up to 15 countries that have not reached new trade agreements with the US, following a 90-day suspension of previously announced levies.

Trump emphasised that the 25 percent rate is intended to address the US trade deficit with both nations and warned that any retaliatory tariffs by Japan or South Korea would be met with equivalent increases by the US.

He also indicated a willingness to reduce or adjust the tariffs if Japan and South Korea open their markets further to US goods and lower their own trade barriers.

The announcement has caused significant market volatility. US stock indices, including the Dow Jones Industrial Average and the S&P 500, dropped sharply after the news, reflecting investor concerns about escalating trade tensions with key allies and the potential for a renewed trade war.

These tariffs come after earlier threats and temporary suspensions; in April, the Trump administration had imposed a 10 percent tariff on most trading partners, with Japan and South Korea facing the prospect of even higher rates if negotiations failed.

Both Japan and South Korea have so far resisted US demands for greater market access and exemptions from existing tariffs on critical sectors such as automobiles, steel, and electronics. The Trump administration’s letters also made clear that no tariffs would be imposed on companies from these countries that choose to manufacture within the United States, with Trump promising expedited approvals for such investments.

The new tariffs mark a significant escalation in US trade policy, targeting two of its closest Asian allies amid ongoing, unresolved negotiations. The situation remains fluid, with the possibility of further adjustments depending on the outcome of continued talks and the responses from Japan and South Korea.

Based On ANI Report