US President Trump Imposes New Tariffs; Extends Deadline to August 1

US President Donald Trump has announced a new round of tariffs on goods from 14 countries, including key trade partners Japan and South Korea, effective from August 1. The unilateral tariffs were previously delayed by 90 days to allow for negotiations, with the president now stating that the new deadline is final, although further extensions may be granted if countries submit satisfactory proposals.

Shifting Goalposts

In what has been described as a high-stakes bargaining tactic, Trump confirmed plans to impose a 25 per cent tariff on imports from Japan and South Korea, while countries like Indonesia, Bangladesh, Thailand, South Africa and Malaysia face duties ranging from 25 to 40 per cent (The Hindu). These tariffs are part of the Trump administration’s policy of reciprocal tariffs, designed to reduce the US’s trade deficits with other countries and boost domestic manufacturing (The Hindu, New York Times).

A Global Impact

The tariff letters were sent to 14 countries, including key Asian economies such as Japan, South Korea, Indonesia, Malaysia and Bangladesh (Al Jazeera English, La Repubblica). Japanese PM Ishiba expressed a desire to reach a mutually beneficial deal (Deutsche Welle). Meanwhile, South Korea's presidential office convened an emergency meeting of the cabinet to craft a response ahead of the new deadline (South China Morning Post).

In addition to the Asian powerhouses, other affected countries are also weighing their options. Indonesia, for instance, has vowed to continue negotiations despite Trump’s decision to maintain a 32% tariff on the country (South China Morning Post).

Implications and Reactions

Analysts suggest that Trump's latest move is less of a final blow and more of a negotiation strategy, demonstrating his preference for brinkmanship-style deal-making (South China Morning Post). They also point out that it could be a part of a broader strategy to force Asian countries to reduce trade with China (Deutsche Welle).

Diplomatic observers, however, believe that these tariffs are unlikely to push Japan and South Korea closer to Beijing, but may offer China an opportunity to strengthen trilateral cooperation with Tokyo and Seoul (South China Morning Post).

On the other hand, uncertainty looms over Taiwan as it nervously awaits the outcome of its tariff negotiations with the US, amidst fears of being hit with duties of 25% or higher (South China Morning Post).

Current Status

Stock markets appear to have shaken off the tariff threat following Trump's announcement of the extended deadline (New York Times). The president also noted that US negotiators remain open to offers from trading partners, suggesting that tariffs could be reduced by — or even after — the deadline on August 1.

Despite the uncertainty, Trump has expressed optimism, stating that his team will begin reaching out to trade partners with new tariff rates as the 90-day pause ends. However, as the new deadline approaches, it remains to be seen how these countries will respond to the US's latest tariff regime.