WASHINGTON — President Trump’s decision to hike tariffs once again on some of America’s largest trading partners rattled markets on Monday, dashing hopes on Wall Street that the White House would cut any significant trade deals, as it had promised, by the middle of this week.
In a series of letters sent to foreign leaders, and promptly posted by the president to his social media platform, Trump said the new rates amount to the cost of doing business with “the extraordinary Economy of the United States, The Number One Market in the World, by far.” Under the new policy, Japan, South Korea, Malaysia and Kazakhstan will face 25% import duties starting Aug. 1, while goods from Laos and Myanmar will face a 40% tariff, according to the letters.
South Africa’s president also received a letter, stating goods from the country imported to the United States would face duties of 30%.
Markets recoiled at the news, with the Dow Jones industrial average dropping 1.4%, the Nasdaq falling 1.2% and the Standard & Poor’s 500 sinking 1.2%.
The move essentially returns U.S. tariff rates on those countries to those Trump first announced on April 2, on what he called Liberation Day, but that he ultimately abandoned over widespread Wall Street panic that began spooking the bond market.
Trump hit pause on the crisis by announcing a 90-day suspension of the higher tariff rates, a period set to expire Wednesday. But the White House press secretary, Karoline Leavitt, said Monday that Trump would extend the deadline to the end of the month.
Several senior officials in the Trump administration had promised a slew of trade deals would follow the April episode — “we’re going to run 90 deals in 90 days,” said Peter Navarro, the president’s top trade advisor. Yet the administration has failed to secure a single detailed trade deal, instead announcing three frameworks of understanding with the United Kingdom, China and Vietnam.
“The president is taking a very deliberate approach to correcting this wrong of many decades, of many past presidents — I think he should be commended for the time and the effort that he’s putting into this,” Leavitt told reporters at a press briefing.
“The fact that he has announced a framework with China, a trade deal with the U.K., a trade deal with Vietnam and many others to come in just six months is truly historic, and it’s a testament to this president and his trade team,” she added.
In his letters to foreign leaders, Trump warned that any effort by their governments to retaliate would be met with escalation.
“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% that we charge,” he wrote.
Leavitt said more letters would be sent in the coming days. She also stated that additional trade deals could be announced soon. “We are close,” she said.
Scott Bessent, the Treasury secretary, told CNBC in an interview that his inbox was “full last night with a lot of new offers” for trade deals ahead of the now-defunct Wednesday deadline.
“We’ve had a lot of people change their tune in terms of negotiations,” Bessent said. “So it’s going to be a busy couple of days.”
The stock market reaction to Trump’s Liberation Day tariffs, which hiked rates on countries all around the world, was an historic rout, eviscerating trillions of dollars in value, with the Standard & Poor’s index bleeding 12% in just four days.
Markets recovered within weeks, after Trump reversed course, with the S&P hitting a record high on July 3.
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