President Trump revived his trade war threat with some of America’s closest allies on Monday, telling Japan and South Korea that they would face a 25 percent tax on their exports as of Aug. 1 unless they agree to trade deals by then.
Mr. Trump also planned to extend the timeline for dozens of other countries to sign deals with the United States or face tariffs, and he was preparing to sign an executive order that would delay the stiff levies that were supposed to snap back on July 9.
Markets dropped after the news, as investors assessed the prospect of more trade conflict with some of America’s closest allies and largest trading partners. The S&P 500 dropped as much as 1 percent. Other major indexes also fell.
In nearly identical letters to the president of South Korea and the prime minister of Japan, Mr. Trump wrote that “we have decided to move forward with you, but only with more balanced, and fair, TRADE.”
“Please understand that the 25% number is far less than what is needed to eliminate the Trade Deficit disparity we have with your Country,” he added.
A few hours later, the president posted several more letters to social media detailing tariff rates that products from other foreign countries would face: 40 percent for exports from Myanmar and Laos, 30 percent for exports from South Africa and 25 percent for exports from Malaysia.
Karoline Leavitt, the White House press secretary, said in a briefing Monday that Mr. Trump would sign an executive order extending a pause on his steepest tariffs until Aug. 1. She also said the president planned to send letters to “approximately 12 other countries” about the rates they would be expected to pay by that date if they did not negotiate deals, then added that even more countries could expect to receive the letters soon.
Mr. Trump announced a 10 percent “baseline” tariff on all U.S. imports in April, as well as higher tariffs on goods from about 60 countries. After the announcement threw stock and bond markets into turmoil, the president temporarily paused the tariffs, urging countries to strike trade deals with the United States instead.
Ms. Leavitt said that the president was making progress on that front, and that his phone was ringing “off the hook from world leaders all the time who are begging him to come to a deal.”
She added: “We’ve seen a lot of positive developments in the right direction, but the administration, the president and his trade team want to cut the best deals for the American people and the American worker.”
Administration officials have indicated that Mr. Trump will also announce several trade deals this week. The United States has been nearing an initial trade framework with India, and officials from the European Union have also seemed increasingly confident that they will be able to reach an arrangement to avoid tariffs. Other countries — including Indonesia, Pakistan, Taiwan and Switzerland — have also been angling for trade deals.
Countries that have so far agreed to trade arrangements, even preliminary handshake agreements, have qualified for lower tariff rates than those Mr. Trump threatened them with in April. So far, the United States has reached only two preliminary trade deals, with Britain and with Vietnam, and both are scant on details. For the U.S. deal with Vietnam, neither country has put out documents clarifying what, if anything, was agreed to.
Both Japan and South Korea are close American allies, but negotiations with them have been proceeding more slowly than U.S. officials want. That’s in part because Japan and South Korea have been having their own elections, and because Mr. Trump is still imposing or threaten other tariffs on their major exports, including cars, steel and electronics. The Japanese and Korean governments have been hesitant to offer Trump concessions while still being hit with high levies on some of their most important industries.
About half of Japanese and Korean exports to the United States could be covered by other tariffs Mr. Trump has imposed or is planning to introduce on critical industries, including cars, electronics, steel and pharmaceuticals, according to calculations by Capital Economics.
Last year, the United States imported 1.5 million passenger cars and light trucks from South Korea and 1.4 million from Japan. The countries are the No. 2 and No. 3 sources of auto imports for the United States after Mexico.
Wendy Cutler, a vice president of the Asia Society Policy Institute, said that both Japan and Korea were close partners on economic security matters and cooperate on industries like shipbuilding, semiconductors, critical minerals and energy.
Companies from both countries have made significant manufacturing investments in the United States in recent years, and both countries are important markets for U.S. businesses, including beef, pork, medical devices and planes, she said.
The threat of tariffs has particularly galled Japan and South Korea because Mr. Trump negotiated and signed trade deals with both countries in his first term. The first Trump administration updated the United States-Korea Free Trade Agreement, which went into force in 2012. Ms. Cutler said that because the United States already had a free-trade agreement with South Korea “almost all of Korea’s tariffs are at zero for U.S. imports, leaving them with less to offer the United States than India or Vietnam with high tariffs.”
Mr. Trump also negotiated and signed a limited trade deal with Japan in 2019, which opened Japanese markets to some U.S. agriculture and established guidelines for the tech industry.
Japanese officials have extended the United States a number of trade offers, including one pledging to purchase more American energy products and defense equipment, and to help the United States in areas like shipbuilding.
But negotiations with Japan stumbled over two main issues: that Japan was exporting far more automobiles to the United States than it imports, and that the Japanese rice market remains relatively closed to American exporters. In a social media post last week, Mr. Trump called Japan “spoiled” and said the United States would be informing it of its new tariff rates.
Jake Colvin, the president of the National Foreign Trade Council, which represents international businesses, said America’s trading partners were facing an uncertain return for lowering their own trade barriers.
While countries that have struck agreements have had their tariffs pared back somewhat, no country has secured tariffs lower than 10 percent.
“If what they get in return is the U.S. permanently raising its tariff rate from whatever it was in 2024 to 10 percent, it’s going to be hard for some of our trading partners to swallow, and it could be politically perilous for them back home with their domestic constituents,” Mr. Colvin said.
Economists said the extension of the July 8 deadline would continue to feed the uncertainty that businesses and consumers have been grappling with for months now. The frequent policy changes have led many businesses to put hiring and investment plans on hold.
“Overall, we’re still seeing it as a prolongation of the uncertainty,” said Sarah House, an economist at Wells Fargo. “There’s still a lot to be desired in terms of details.”
Joe Rennison, Jack Ewing and Ben Casselman contributed reporting.
Ana Swanson covers trade and international economics for The Times and is based in Washington. She has been a journalist for more than a decade.
Tony Romm is a reporter covering economic policy and the Trump administration for The Times, based in Washington.
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