On Monday, in a pair of poorly written letters, President Donald Trump threatened to impose a 25% tariff on South Korea and Japan starting on Aug. 1 if the businesses inside these international locations don’t “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 within the letters, which have been overloaded with commas and full of nonsensical capitalizations.
South Korea has expressed curiosity in negotiation with Trump, however mentioned that it’s unclear what Trump even needs out of an settlement, which makes the negotiations tough.
South Korean President Lee Jae-myung delivers a speech to mark his first 30 days in workplace at Yeongbingwan of Blue Home in Seoul, South Korea, on July 3.
“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 instructed the Singaporean outlet the Straits Instances. “All I can say for now is that we’re doing our utmost.”
Trump’s letters come two days earlier than the 90-day pause on his “Liberation Day” tariffs is about to run out, leaving Trump with a number of choices: he can let the astronomical tariffs he positioned on practically each nation on the planet go into impact, pausing the tariffs once more, or some type of center floor the place he places a brand new and arbitrary tariff on imported items if commerce offers aren’t made in time. The letters to South Korea and Japan recommend he’s going with the third possibility.
Economists say that imposing a 25% tariff on South Korea and Japan can be dangerous for the financial system, as corporations will merely move down these taxes onto American customers, spiking inflation to ranges that would plunge the nation right into a recession. America imports billions of {dollars} value of products from South Korea and Japan, together with equipment and mechanical home equipment, transportation gear, and chemical compounds, plastics, and rubber.
Trump, for his half, mentioned when he paused the “Liberation Day” tariffs that he would make 90 commerce offers in 90 days with international locations.
However with two days to go earlier than the deadline, not a single deal is absolutely signed. And the so-called “deals” Trump mentioned are within the works with China, Vietnam and the UK are horrible for American customers, as they’ll result in elevated tariffs on objects imported to the US from these international locations that corporations will nearly actually move all the way down to American customers within the type of elevated costs.
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After all, it is unclear if the brand new tariff risk in opposition to Japan and South Korea will ever even come to fruition. Trump has caved on practically all of his tariff bulletins, incomes him the pejorative nickname TACO—which stands for Trump All the time Chickens Out. Certainly, within the letters he despatched to the 2 international locations, he mentioned, “These Tariffs could also be modified, upward or downward, relying on our relationship along with your Nation.”
However, the inventory market responded negatively to Trump’s newest commerce mishegas, with the Dow Jones Industrial Common falling greater than 500 factors.
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