By Reuters and published by CNA
Washington – US President Donald Trump on Monday (July 7) began telling trade partners – among them Thailand – that sharply higher US tariffs will start Aug. 1, marking a new phase in the trade war he launched earlier this year.
The 14 countries sent letters so far, which included smaller US exporters like Thailand, Tunisia and Serbia, hinted at opportunities for additional negotiations while at the same time warning that any reprisal steps would be met with a like-for-like response.
Trump said on Monday that the United States would impose 25 percent tariffs on Tunisia, Malaysia and Kazakhstan; 30 percent on South Africa, Bosnia and Herzegovina; 32 percent on Indonesia; 35 percent on Serbia and Bangladesh; 36 percent on Cambodia and Thailand and 40 percent on Laos and Myanmar.
“If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25 percent that we charge,” Trump said in letters, released on his Truth Social platform, to Japan and South Korea.
The higher tariffs take effect Aug. 1, and notably will not combine with previously announced sector tariffs such as those on automobiles and steel and aluminium.
That means, for instance, that Japanese vehicle tariffs will remain at 25 percent, rather than the existing 25 percent sector tariff climbing to 50 percent with the new reciprocal rate as has occurred with some of Trump’s tariffs.
The clock has been ticking for countries to conclude deals with the United States after Trump in April unleashed a global trade war that has roiled financial markets and sent policymakers scrambling to protect their economies.
Trading partners got another reprieve as Trump signed an executive order on Monday extending the Wednesday deadline for negotiations to Aug. 1.
Trump has kept much of the world guessing on the outcome of months of talks with countries hoping to avoid the hefty tariff hikes he has threatened.
The rate for South Korea is the same as Trump initially announced, while the rate for Japan is 1 point higher than first announced on Apr. 2.
A week later, he capped all of the so-called reciprocal tariffs at 10 percent until Wednesday. Only two agreements have so far been reached, with Britain and Vietnam.
South Korea said it planned to intensify US trade talks and considers Trump’s plan for a 25 percent tariff from Aug. 1 as effectively extending a grace period on implementing reciprocal tariffs.
“We will step up negotiations during the remaining period to reach a mutually beneficial result to quickly resolve the uncertainties from tariffs,” the country’s Industry Ministry said.
There was no response from the Japanese embassy in Washington.
Wendy Cutler, vice president of the Asia Society Policy Institute, said it was unfortunate Trump was hiking tariffs for two of the closest US allies, but there was still time for a breakthrough in negotiations.
“While the news is disappointing, it does not mean the game is over,” Cutler said.
Market drop
US stocks fell in response, the latest market turmoil as Trump’s trade moves have repeatedly whipsawed financial markets and sent policymakers scrambling to protect their economies.
US stocks were driven to near bear-market territory by his cascade of tariff announcements through the early spring but quickly rebounded to record highs in the weeks after he put the stiffest levies on hold on Apr. 9.
The S&P 500 closed down about 0.8 percent, its biggest drop in three weeks. US-listed shares of Japanese automotive companies fell, with Toyota Motor closing down 4.0 percent and Honda Motor off by 3.9 percent. The dollar surged against both the Japanese yen and the South Korean won.
“Tariff talk has sucked the wind out of the sails of the market,” said Brian Jacobsen, chief economist at Annex Wealth Management. Most of the announced tariff rates have been rounded down, he added, and the letters come across as “take it or leave it” offers.
US Treasury Secretary Scott Bessent said earlier on Monday he expected several trade announcements in the next 48 hours, adding that his inbox was full of countries’ last-ditch offers.
Trading blocs
The European Union will not be receiving a letter setting out higher tariffs, EU sources familiar with the matter told Reuters on Monday.
The European Union still aims to reach a trade deal by July 9 after European Commission President Ursula von der Leyen and Trump had a “good exchange”, a commission spokesperson said.
It was not clear, however, whether there had been a meaningful breakthrough in talks to stave off tariff hikes on the United States’ largest trading partner.
The EU has been torn over whether to push for a quick and light trade deal or leverage its economic clout to negotiate a better outcome. It had already given up hopes for a comprehensive trade agreement before the July deadline.
Trump has also said he could impose a 17 percent tariff on EU food and agriculture exports. The president also threatened leaders of developing nations in the BRICS group, who are meeting in Brazil, with an additional 10 percent tariff if they adopt “anti-American” policies.
The group includes Brazil, Russia, India and China among others.
CAPTIONS:
Top:US President Donald Trump waves to the media after exiting Air Force One, at Joint Base Andrews, Md, on July 6, 2025, en route to the White House after spending the weekend in New Jersey. Photo: AP/Jacquelyn Martin and published by CNA
Front Page: US President Donald Trump speaks to members of the media upon his arrival at Morristown Airport, New Jersey on July 6, 2025. File photo: Reuters/Nathan Howard and published by CNA
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