
Trump's Bold Move: Steep Tariffs Unleashed on Allies in Trade Deal Push
2025-07-07
Author: Ming
Trump's Dramatic Tariff Announcement
In a striking move, President Donald Trump revealed a hefty 25% tariff on key allies Japan and South Korea on Monday, July 7. This aggressive tactic is part of his ongoing campaign to pressure these nations—and twelve additional countries—to negotiate more favorable trade agreements with the United States.
A Wider Net of Tariffs
Alongside Japan and South Korea, Trump sent similar notices to a dozen other trading partners such as Indonesia, Bangladesh, Thailand, South Africa, and Malaysia, imposing tariffs that range from 25% to a staggering 40%. However, the introduction of these tariffs has been postponed from the original starting date, now set for August 1.
Reciprocity at Stake
In his letters to the leaders of Japan and South Korea, Trump expressed that their trading arrangements with the U.S. are "unfortunately, far from reciprocal." He cautioned that further escalation could occur if these nations retaliate against the newly imposed duties.
A Shift from Previous Levies
Currently, affected trading partners are operating under a 10% tariff that Trump implemented earlier. However, in an interesting twist, the President mentioned he might consider adjusting these new tariffs if other countries show a willingness to modify their trade policies.
Resistance from Japan
Japan’s Prime Minister, Shigeru Ishiba, immediately countered on Sunday, stating he would not yield easily in trade negotiations with Washington, signaling potential tensions ahead.
Delay in Tariff Implementation
White House Press Secretary Karoline Leavitt confirmed that Trump would be signing an order to delay the steep tariffs originally set for July 9, now officially set to commence on August 1.
Details of the Tariff Range
Specifics provided by Trump on his Truth Social platform indicated striking tariffs for some countries: Indonesia at 32%, Bangladesh at 35%, and Thailand at 36%. Leavitt noted that Trump would outline the "reciprocal tariff rates" for these partners in the upcoming month as negotiations progress.
The Road to Trade Deals
Back in April, during what Trump deemed "Liberation Day," he announced sweeping tariffs, declaring America was being "ripped off" on trade. Despite hopes for multiple agreements by July, tangible results have been limited to pacts with Britain and Vietnam, while the tariffs on U.S.-China trade have seen a temporary reduction.
Interpreting the Strategy
When asked about targeting South Korea first, Leavitt emphasized, "It's the President's prerogative." Analysts believe this could send a strong message to other nations about U.S. trade stances.
Potential for New Deals
U.S. Treasury Secretary Scott Bessent hinted that more trade announcements could be on the horizon, indicating a notable shift in negotiations as responses flood in from various nations.
Market Reactions to Tariff Threats
The announcement sent tremors through the market, with the Dow dropping by 0.9% and the S&P 500 falling by 0.8%.
A Broader Trade Perspective
Trump hasn’t ruled out imposing an additional 10% tariff on countries aligned with the emerging BRICS nations, accusing them of "Anti-American policies" after they criticized his tariffs during a recent summit. Despite the looming threats, nations are scrambling to negotiate and avert these hefty tariffs altogether.
Continued Dialogues with Global Leaders
The European Commission reported a positive dialogue between EU chief Ursula von der Leyen and Trump, highlighting the ongoing importance of these international trade discussions.