【By Guan察者网, Liu Bai】

On July 7 local time, US President Trump successively announced new tariffs on multiple countries, with Japan and South Korea each being subject to a 25% tariff. The tariff rate for South Korea is consistent with what was announced in early April, while the rate for Japan has increased by one percentage point. Foreign media generally interpreted this as the latest move by Trump to further pressure Japan and South Korea, as well as a demonstration for other countries.

The Nikkei Asia Review on July 8 cited analysts as saying that Japan is the most important ally of the United States in Asia and found it hard to understand why Trump would threaten to impose tariffs in this way. Another scholar also stated that it was disappointing for Trump to raise tariffs on Japan and South Korea, two of America's closest allies.

Japan and South Korea reacted differently to the US' further pressure. Japanese Prime Minister Ishiba Shoichi bluntly said "very regrettable," emphasizing that the Japanese government "did not easily compromise." The South Korean government explained that the new government had just taken office, leading to limited negotiation time, and would also push for its own reforms to reduce the trade surplus with the US.

Trump applies pressure while leaving room

On July 7, Trump signed an executive order to extend the implementation date of the so-called "reciprocal tariffs" to August 1, instead of the original date of July 9.

Trump also started sending letters to trade partners who have not yet reached an agreement on tariffs. From August 1, the US will significantly increase tariffs. Reuters described this as marking a new stage in the trade war that the US launched in early April.

After the announcement, the US stock market fell, with the S&P 500 index closing down about 0.8%, the largest drop in three weeks. The stock prices of Japanese automakers listed in the US market dropped significantly, with Toyota falling 4.0% and Honda dropping 3.9%. The dollar rose sharply against the Japanese yen and the South Korean won, showing that the market's concern over trade tensions has increased.

US stock performance over the past three trading days, The Wall Street Journal illustration

So far, 14 countries have received notices from Trump. These letters suggest there is still room for negotiation, but at the same time warn the other party that if they take retaliatory actions, the US will "reciprocate with higher tariffs."

On the "Truth Social" platform, Trump posted letters he wrote to Japanese Prime Minister Ishiba Shoichi and South Korean President Lee Jae-myung, stating that starting August 1, the US will impose a 25% tariff on imports from Japan and South Korea.

In these two letters, which are almost identical in content, Trump said that the new tariffs will be independent of various industry tariffs, such as those on automobiles, steel, and aluminum, meaning they will not be added on top of previously announced industry tariffs. For example, the tariff on Japanese automobiles remains at 25%, rather than increasing to 50% by adding another 25%.

He said, "Please understand that a 25% tariff rate is far below the level needed to eliminate the trade deficit between our countries."

Trump also warned, "If you decide to increase tariffs, whatever amount you increase them by will be added on top of our 25% tariff rate."

Trump also gave some leeway to Japan and South Korea to reach a trade agreement before August. In his letter, Trump stated that if the other side is willing to open up its market and remove tariff barriers against the US, the US may reconsider this decision.

"As you know, if Japanese (South Korean) companies or enterprises within your country decide to build or produce products in the US, we will not impose tariffs. In fact, we will do everything possible to approve them quickly, professionally, and routinely — in other words, within just a few weeks," Trump wrote.

Japan expressed "great regret," South Korea "accelerated the process"

Wendy Cutler, Deputy Director of the Asia Society Policy Institute, said that Trump's decision to raise tariffs on two of America's closest allies was disappointing, but there is still an opportunity for breakthroughs through negotiations. "Although this news is disappointing, it does not mean everything is set in stone," she said.

July 7, 2025, Yokohama, Japan, cars waiting to be loaded at the port. Visual China

Matthew Goodman, Director of the Center for Green Economy Research at the Council on Foreign Relations, told the Nikkei Asia Review that Japan is the most important ally of the United States in Asia and could not understand why Trump would threaten to impose tariffs in this way.

"The only comfort is that it's just a letter and not yet implemented tariffs. There may still be a solution through negotiations before August 1," Goodman said. Trump chose to delay the tariff implementation from July 9 partly to avoid a strong financial market reaction, "once such financial turbulence occurs, many American companies and his supporters will be very unhappy," he said.

According to Yonhap News Agency on August 8, in response to Trump's tax plan, the South Korean presidential office plans to hold an emergency meeting on the afternoon of August 8. The South Korean presidential office said that it will hold a meeting of relevant departments at 1:30 PM on the same day regarding the US-South Korea trade issue.

Additionally, the Ministry of Industry, Trade, and Energy of South Korea also stated, "In order to quickly eliminate uncertainty, we will accelerate the negotiation process with the US during the remaining time and strive to achieve mutually beneficial negotiation results."

The ministry stated that the new government was established shortly after, and negotiations were conducted with the US on the basis of national interests, but due to limited time, it was difficult to reach consensus on all issues. The US' new measures mean that the US will suspend the reciprocal tariffs until August 1, and will accelerate the negotiation process during the remaining time, striving to achieve a win-win negotiation outcome and eliminate the uncertainty caused by the tariff issue as soon as possible.

The ministry also proposed to promote domestic institutional reforms and optimize the regulatory system to reduce the US trade deficit with South Korea.

According to Tokyo Broadcasting System, the Japanese government held a comprehensive countermeasures headquarters meeting on August 8 to discuss responses to the US' tariff measures. Ishiba Shoichi responded to the US' measures at the meeting.

Ishiba Shoichi said, "We are very regretful about the US' announcement to impose additional tariffs... The Japanese government did not easily compromise in the difficult negotiations, spoke out what should be said, and protected what should be protected." He also said that the actual implementation date of the tariff is August 1, which means the negotiation period has been extended, and the government will continue to negotiate with the US.

Trump has repeatedly complained that Japan is not importing enough cars from the US, and even for a simple request like importing US rice, Japan refused to accept it. He said, "In terms of trade, they are very unfair, and those days are gone."

The Nikkei Asia Review said that Trump's threat to further increase the tariff on Japan aims to pressure Japan. A White House official revealed on July 2 that the Trump administration has decided to put the negotiations with Japan on hold and prioritize negotiations with other trade partners, including India.

Shohei Akasaka, Minister of Economic Revitalization of Japan, video screenshot

During the seventh round of tariff negotiations in late June, Shōhei Akasaka, the main person in charge of the Japan-US tariff negotiations, returned empty-handed without meeting US Treasury Secretary and trade negotiator Brian Deese. The Japanese government insisted on completely exempting the car tariff, while the US repeatedly expressed a desire to retain the car tariff and dissatisfaction with Japan's trade deficit, making the negotiations more difficult.

During the negotiations, the Japanese government repeatedly urged the US to fully exempt the car tariff, while also stating that it would not sacrifice the interests of domestic farmers to obtain tariff reductions. Japanese Chief Cabinet Secretary Hayashi Fumio reiterated on July 1 that he would not disclose specific details of the Japan-US trade negotiations, "but would not consider sacrificing agriculture in future consultations."

Late on the evening of July 7, Trump also announced tariff plans for other countries: 40% for Myanmar and Laos, 36% for Thailand and Cambodia, 35% for Bangladesh, 32% for Indonesia, 25% for Malaysia and Kazakhstan. In addition, the US will also impose a 30% tariff on South Africa, a 35% tariff on Serbia, and a 25% tariff on Tunisia, among others.

Additionally, EU insiders confirmed to Reuters that the EU would not receive a tariff notice from the US.

The report said that the EU once gave up hope of reaching a comprehensive trade agreement and is currently weighing whether to sign a deal quickly or seek better conditions.

An EU Commission spokesperson, Olof Gullstrand, said on July 7, "We are continuing to work towards the deadline of July 9, so political and technical-level contacts between the EU and the US are still ongoing."

He revealed that significant progress had been made in reaching a principle agreement after the EU Trade Commissioner, Valdis Dombrovskis, flew to Washington to meet with his US counterparts.

He said that EU Commission President Ursula von der Leyen also spoke with Trump on June 6, and the two had a "good communication." "We are fully prepared to reach a principle agreement by Wednesday and are doing our utmost to achieve this," he said.

Trump also threatened that if the BRICS countries take a "anti-American" stance in policy, an additional 10% tariff would be imposed on them.

President Lula of Brazil criticized Trump's threats during an interview on July 7, telling reporters, "The world has changed, and we don't need an emperor." Lula emphasized that the BRICS countries want to find another way of global organization from an economic perspective, which is precisely the reason some people feel uneasy.

This article is exclusive to Observer, and no reproduction is allowed without permission.

Original: https://www.toutiao.com/article/7524550308443013667/

Statement: This article represents the views of the author and is not necessarily the views of the publisher. Please express your opinion by clicking on the [Top/Down] button below.