With a series of letters to trading partners from the United States, President Donald Trump started on Monday with the relaunch of his ‘reciprocal import duties’. The controversial rates, initially presented in April only shortly thereafter for ninety days until July 9, must now take effect on 1 August. This unleashes the trade war that Trump has unleashed a new phase.
Letters to fourteen countries, in which Trump explains the rate that will apply to them, were gradually made public on his Platform Truth Social on Monday. For goods from Japan and South Korea, an import tax of 25 percent will apply, he said the first. For South Africa that is 30 percent. Malaysia, Thailand, Laos, Myanmar, Serbia, Bosnia and Herzegovina, Tunisia and Kazakhstan also learned their rate.
According to Karoline Leavitt, spokesperson for the White House, more letters will follow in the coming days. She spoke of “ready -made trading plans for every country.” The European Union, which is negotiating with the Trump government on a trade agreement, did not expect a letter from the president, reported Reuters news agency on Monday at the start of the evening on the basis of anonymous sources in Brussels.
Deadline
In addition, the White House announced that the start of the taxes will be postponed by more than three weeks, from Wednesday 9 July to Friday 1 August. On Wednesday, the deadline would be for countries to close trade agreements with the US, after a break of ninety days that the White House announced in April. That happened shortly after the initial presentation of the taxes on goods from dozens of countries by Trump with a large plate in the rose garden of the White House.
The postponement of ninety days, announced after panic at the stock markets about the taxes, was intended to encourage countries to negotiate with the Trump government. At that time a levy of 10 percent applied. The Trump government predicted ‘ninety deals in ninety days’, but has since only concluded new trade agreements with the United Kingdom and Vietnam. The White House also reached a framework agreement with China.
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Trump is – after political successes in Washington and on the international stage – on more progress at the Handelsfront. The further delay until 1 August was presented by employees of the White House as an injury time to be able to complete more chords. Finance Minister Scott Bessent said on Monday that his inbox was full of proposals from countries, and that he expects several chords in the next 48 hours. Trump’s letters seem intended to increase the pressure.
The letters, printed on the White House letterhead, are written in the style that Trump also uses on social media, with exaggeration and phrases in capital. “We invite you to participate in the extraordinary economy of the United States, by far the largest market in the world,” writes Trump to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae-Myung. The levies “can be adjusted, up or down, depending on our relationship with your country,” said Trump in both letters.
Foreign leaders are warned not to take retaliation measures by increasing their own import duties. “If you decide to increase your rates for whatever reason, then the amount with which you increase them will be added to the 25 percent that we charge,” said Trump. He ends with the sentence he often uses to conclude his messages on social media: “Thank you for your attention to this issue.”
Deficit
For Japan and South Korea, important allies of the US in Asia, the rates almost correspond to the taxes that Trump announced in April: 24 percent for Japan and 25 percent for South Korea. They do not come on top of running taxes on cars, steel and aluminum. According to Trump, the aim of the taxes is to eliminate the trade deficit that the US has with both countries and to reduce the production of goods to the US. Critics point out that the taxes are not paid by the countries involved, but by American buyers of their products, which can stir up inflation.
Wall Street responded negatively to Trump’s letters. The S&P 500 sharing index, which after the original announcement of the taxes in April, but since the postponement has been strongly recovered, fell by almost 1 percent on Monday. Investors fear that the relaunch of the taxes will lead to economic delays. The interest on 10-year-old US government bonds, which is being monitored for indications that the Creditworthiness of the US is under pressure, increased to almost 4.39%.
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Incidentally, Trump also threatened with extra levies of 10 percent on goods from countries that join the “anti-American policy” of the BRICS, the economic partnership of Brazil, Russia, India, China and South Africa. Indonesia, Iran, the United Arab Emirates, Egypt and Ethiopia have also joined that covenant. Trump did not give any further details. Brazilian President Luiz Lula da Silva responded negatively to that threat. “The world has changed, we don’t want an emperor,” he said on Monday at the end of the BRICS summit in Rio de Janeiro.