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Only two trade deals have been struck so far since “Liberation Day”.
Only two trade deals have been struck so far since “Liberation Day”.
What is happening?
US President Donald Trump has taken his trade war into a new phase, announcing steep 25% tariffs on imports from key allies Japan and South Korea.
Hardline on negotiations
The move, effective August 1, also extends to a wider group of countries, signaling a broader hardline stance on trade negotiations.
Wall Street Reacts Sharply, Asia Holds Steady
According to Reuters, the announcement rattled Wall Street, with the S&P 500 sliding nearly 0.8% on the day.
Despite the drop in U.S. markets, Asian exchanges remained relatively steady, with Japan’s Nikkei recovering early losses and South Korean stocks even posting gains.
14 Nations Targeted
Trump’s letters, released on his Truth Social platform, were addressed to 14 countries, including major exporters like Japan and South Korea and smaller ones like Tunisia, Serbia, and Thailand.
Each letter hinted at room for negotiation but warned of swift retaliation if tariffs were matched.
“If You Raise, We’ll Match—And Add More”
In a pointed message, Trump told Japan and South Korea that any increase in their tariffs would trigger a proportional response on top of the new 25% US rate.
However, the new tariffs will not stack with previously announced sector-specific levies.
New Deadline for Trade Deals
Trump extended the deadline for new trade agreements to August 1, buying partners a few more weeks to negotiate.
While he called the date “firm,” he left the door open to flexibility if meaningful talks progressed.
US Allies Scramble to Respond
Japanese Prime Minister Shigeru Ishiba confirmed receiving a proposal from Washington and expressed optimism about revising tariff terms.
Seoul said it would intensify dialogue, interpreting the move as an extended grace period.
Southeast Asian Nations Prepare for Impact
Thailand began crafting a back-up strategy, hoping to secure favorable terms.
Malaysia acknowledged US concerns and emphasized the need for “constructive engagement.”
Indonesia also signaled it was ready to negotiate, with talks planned in Washington.
South Africa Pushes Back on “Unjustified” Tariffs
South African President Cyril Ramaphosa criticized the planned 30% tariffs as unfair, pointing out that most US goods enter his country tariff-free.
His government vowed to continue talks with Washington in search of a resolution.
Geopolitics Shape the Tariff Map
Tariff rates vary significantly across the targeted nations—from 25% on Tunisia and Kazakhstan to a steep 40% on Laos and Myanmar.
The differing levels appear tied to trade balances and Washington’s broader geopolitical goals.
Markets Brace Ahead of August Deadline
With the clock ticking, analysts expect financial markets to remain turbulent.
National Australia Bank’s Tapas Strickland warned of heightened volatility as more letters surface and talks ramp up.
Only two deals done
Meanwhile, only two trade deals—Britain and Vietnam—have been finalized, leaving much uncertainty on the table.
