Japan and South Korea said they’ll keep pushing for a better deal for their exports to the US after President Donald Trump shifted his tariff deadline to Aug. 1 and tweaked the rates he’s set for many economies.
In his first wave of letters to key trading partners, Trump set levies of 25% on goods from Japan and South Korea.
He also signed an executive order holding off the new duties until Aug. 1.
“It’s regrettable that the US has announced higher tariff rates,” Japanese Prime Minister Shigeru Ishiba said after discussing the state of play with cabinet ministers at a meeting in Tokyo.
“We’ll continue talks with the US, protecting our national interests while actively seeking the possibility of a deal and benefits for both the US and Japan.”
South Korea said it will fix rules and regulations to address US demands to lower non-tariff barriers. “We see this letter as a de facto extension of the grace period for imposing reciprocal tariffs until Aug. 1,” South Korea’s Industry Ministry said in a statement on Tuesday, vowing to accelerate negotiations to reach a mutually beneficial agreement.
The extension by Trump leaves Asia’s economies squarely in the US administration’s tariff sights while giving officials a little over three additional weeks to negotiate lower rates.
Complicating such accords is the prospect of separate sectoral tariffs on products including cars, chips and pharmaceuticals that are critical industries for economies across Asia.
Asia’s MSCI regional stock benchmark traded in a tight range amid gains in South Korea and Japan. Toyota Motor rose 0.5% along with other Japanese automakers as the yen held its losses.
The won strengthened, while a gauge of the dollar dipped 0.1%.
The 25% across-the-board tariff announced by Trump on all shipments from South Korea matches the level that was set to be implemented on July 9.
Japan’s new rate is a percentage point higher than that originally announced on April 2.
Even though Japan and Korea are two of America’s closest allies in Asia, they’re both dealing with complex domestic circumstances where cutting trade deals might be risky politically.
South Korean President Lee Jae Myung only took office on June 4, and elections in Japan’s upper house later this month made Ishiba’s government reluctant to offer too much in concessions.
Asked why Trump had chosen to hit Japan and South Korea first, White House Press Secretary Karoline Leavitt said it was “the president’s prerogative.”
“Those are the countries he chose,” she added.
“If the tariffs stay in place they likely have a major detrimental impact on Japanese companies that export to the US, particularly the automakers,” said James Halse, CEO & CIO at Senjin Capital Pty Ltd.
“That negative impact likely cascades up the supply chain to their suppliers in Japan who may not export to the US themselves.”
Japan was initially seen as a promising partner for a quick deal, but the negotiations hit a roadblock over car tariffs.
The sector accounts for most of the US trade deficit with Japan while being a key growth driver for Tokyo.
Japan will take all possible measures to mitigate the impact of the 25% across-the-board tariffs, Chief Cabinet Secretary Yoshimasa Hayashi said in a regular press conference Tuesday.
Trump also announced 25% rates on Malaysia, while Laos and Myanmar would face a 40% levy.
Other nations hit with levies included Indonesia with a 32% rate, Bangladesh with 35%, and Thailand and Cambodia with duties of 36%.
Later at an event at the White House, Trump said that “for the most part” he was content to simply impose the duties, even as he indicated he was continuing negotiations, including talks with India that could soon wrap up.
“We’ve made a deal with the United Kingdom, we’ve made a deal with China, we’ve made a deal — we’re close to making a deal with India,” Trump said.
“Others we met with, we don’t think we’re going to be able to make a deal. So we just send them a letter.”
Loading ...
