Guess which countries Trump is threatening with more tariffs now
On Monday, in a pair of poorly written letters, President Donald Trump threatened to impose a 25% tariff on South Korea and Japan beginning on Aug. 1 if the companies within those countries do not "decide to build or manufacture product within the United States."
“We invite you to participate in the extraordinary Economy of the United States, the Number One Market in the World, by far,” Trump wrote in the letters, which were overloaded with commas and filled with nonsensical capitalizations.
South Korea has expressed interest in negotiation with Trump, but said that it’s unclear what Trump even wants out of an agreement, which makes the negotiations difficult.
“We’re doing our best, and the goal is to reach a genuinely mutually beneficial outcome, but at this stage, both sides still haven’t clearly defined what exactly they want,” South Korea’s President Lee Jae-myung told the Singaporean outlet the Straits Times. “All I can say for now is that we’re doing our utmost.”
Trump’s letters come two days before the 90-day pause on his "Liberation Day" tariffs is set to expire, leaving Trump with several options: he can let the astronomical tariffs he placed on nearly every country on the planet go into effect, pausing the tariffs again, or some sort of middle ground where he puts a new and arbitrary tariff on imported goods if trade deals aren’t made in time. The letters to South Korea and Japan suggest he is going with the third option.
Economists say that imposing a 25% tariff on South Korea and Japan will be bad for the economy, as companies will merely pass down those taxes onto American consumers, spiking inflation to levels that could plunge the country into a recession. The United States imports billions of dollars worth of goods from South Korea and Japan, including machinery and mechanical appliances, transportation equipment, and chemicals, plastics, and rubber.
Trump, for his part, said when he paused the “Liberation Day” tariffs that he would make 90 trade deals in 90 days with countries.
But with two days to go before the deadline, not a single deal is fully signed. And the so-called "deals" Trump said are in the works with China, Vietnam and the United Kingdom are horrible for American consumers, as they will lead to increased tariffs on items imported to the United States from those countries that companies will almost certainly pass down to American consumers in the form of increased prices.
Related | Trump threatens not to chicken out yet again over tariffs
Of course, it's unclear if the new tariff threat against Japan and South Korea will ever even come to fruition. Trump has caved on nearly all of his tariff announcements, earning him the pejorative nickname TACO—which stands for Trump Always Chickens Out. Indeed, in the letters he sent to the two countries, he said, "These Tariffs may be modified, upward or downward, depending on our relationship with your Country.”
Nevertheless, the stock market responded negatively to Trump's latest trade mishegas, with the Dow Jones Industrial Average falling more than 500 points.