Trump Tariffs Japan South Korea
Trump’s Trade War at a Tipping Point with 25% Tariffs on Japan and South Korea
President Trump has put in place what is in all aspects a dramatic increase in the trade war which includes 25% tariffs on Japan and South Korea, two very key allies of the US which he has announced will take effect August 1, 2025. This surprise move in trade policy is a break from past practice and will indeed do great damage to international relations and at the same time put at risk global markets which will feel the impact of broken trade relationships that have for years been a staple of stability in the Asia-Pacific.
On July 7, 2025, global markets were rocked by the Trump tariffs which he announced via his Truth Social platform directed at what he terms key allies Japan and South Korea. This tariff increase is a shift to a more aggressive phase in Trump’s trade policy which the president put forth that any recourse they may have will only see the U.S. respond with even greater economic penalties.
“If at some point you do raise your Tariffs out of which we put any increase you see fit then that will be in addition to the 25% we charge.”
Devastation in Global Markets and Economy
The Trump trade war expansion set off an immediate market turmoil which saw the S&P 500 report its best single day drop in three weeks of reporting which was a 0.8% fall as investors flocked to safety. In that same period Japanese car giants Toyota and Honda saw their stock prices tank — Toyota’s share price fell 4.0% and Honda lost 3.9% in reaction to the tariff news which proved to be very damaging.
The large scale effect of the economy is beyond what we see at the company level, what we are also seeing is that the Trump tariffs in Japan and South Korea may in fact be the start of a large scale global recession which is what economists are reporting. At the same time from the report by Yale University’s Budget Lab we see that the 2025 US tariff measures will reduce real GDP growth by 0.7 percentage points and also we may see a very large increase in the unemployment rate.
Massive Tariff Expansion Targets 14 Countries with Punitive Rates
Trump’s trade war went beyond Japan and South Korea to include 14 countries which saw different tariff rates which in turn were put in to break their export competitiveness. The massive tariff expansion includes:
- Myanmar and Laos: 40% taxes which is the greatest penalty.
- Thailand and Cambodia: 36% taxes on exports from Southeast Asia.
- Bangladesh and Serbia: Tariffs of 35% are hard on smaller economies.
- Indonesia: Tariffs of 32% decimating natural resource exports.
- South Africa and Bosnia: 30% tariffs eliminating trade relationships.
- Malaysia, Tunisia, and Kazakhstan: 25% tariffs with Japan and South Korea.
This tariff policy is of a very aggressive design which impacts $2.3 trillion of U.S. import goods which is 71% of total U.S. import volume and which we see as the largest tax increase since 1993.
BRICS Countries Face Additional 10% Trade Penalties as Trade War Worsens
This is an unbreakable rule.
Chinese Foreign Ministry Spokesperson Mao Ning said that “tariffs should be a tool of last resort and not for coercion or pressure.” Also, we see that BRICS puts forth the idea of “win-win cooperation” which does not target any country. Crashing in with these additional tariffs we see the multilateral trade relationships broken and diplomatic cooperation put to ruin.
Economic Experts Warn of Catastrophic Consequences
Leading economists have put out dire reports on the effects of Trump’s trade war expansion. Lawrence Summers, former Treasury Secretary, reported that “Never before has there been this sort of financial ruin from a single president’s words at the time of which we can report, we see losses which add up to almost $30 trillion.”
Nobel Prize winner Paul Krugman reported that the tariffs were more than what most had expected; in fact, he said they represent a much greater shock to the economy than the Smoot-Hawley tariff of 1930. Also very damaging is his prediction that the wide scale implementation of these tariffs will cause stagflation and economic recession.
Justin Wolfers from the University of Michigan reports that the tariffs are a huge issue, a mess, and based on bad info which also reports that they will hit working class Americans the hardest. Also, we see in the tough economic climate that what Trump’s trade war is doing is raising consumer prices which in turn is going to break the back of middle class families.
Social Media Erupts as Trade War Escalates
Social media has gone wild with reaction to Trump’s tariff announcements which also saw him nicknamed “TACO Trump” (Tk’ Always Chickens Out) for a tendency to put forth tough measures which he later watered down. The criticism is great and immediate which also points out the unpredictable nature of Trump’s trade policy and its large scale effect on market confidence.
Political critics have gone after the issue of our allied countries’ support which the Republican group “Republicans Against Trump” has labeled as a crazy, stupid move that will cause us to lose those allies and at the same time raise costs for the American consumer. We are seeing very serious political results of this which may break up the old alliance systems in the Asia-Pacific.
Japan and South Korea React to Economic Pressure
Japanese Prime Minister Shigeru Ishiba has said that he “will not easily give in” in trade talks with Washington, which is a sign of very strong Japanese resistance to Trump’s large take-it-or-leave-it offers. The tough trade pressure has put Japan in a position to consider some giveways which include greater purchase of American energy products and defense equipment.
South Korea’s Industry Ministry reported that they will step up talks in the run out of the road to which we have a mutually beneficial result which in fact extends Trump’s August 1st deadline which for all intents and purposes is a grace period for putting in place reciprocal tariffs. That which is put forward by the economic crunch is that which forces both nations to walk that fine line between holding on to sovereignty and at the same time also avoiding the doomsday of trade which is broken.
Market Instability Results from Trade War
Trump’s trade war escalation has brought us to uncharted volatile times which saw the CBOE Volatility Index (VIX) rise 23% at one point in the action. The markets’ strong reaction is that of very concerned investors who expect very negative economic outcomes from what will be a long-term trade dispute with key allies.
Currency markets have seen great turmoil in which the dollar has risen against the Japanese yen and South Korean won but at the same time has been sold off against other major currencies. Devastating currency volatility has put at risk many established trade relationships and export competitiveness in diverse sectors.
Devastating Consumer Impact and Economic Consequences
Tariff policies will put great strain on American consumers which in turn see 60% of the tariff costs passed on by companies. Also reported is that which average American families will see a drop in household income by about $2,300.
Lower income families bear the brunt which includes an annual pre-trade action loss of $1,200 per household. Also reported is that which we see to be the truth in the economic damage: Trump’s trade war is hurting the very people he says he is helping, which in turn is creating a regressive tax which leaves middle class purchase power a thing of the past.
August 1 Deadline Puts Trade Deals Under Great Pressure
In August 1st we see a deadline which in its devastation leaves little time for trade partners to agree to what the US is pushing forward on or else suffer very serious economic results. Secretary of Treasury Scott Bessent reports that his desk is a go-go with a lot of new put forth ideas as countries frantically try to head off the hard line tariff policies.
The pressing timetable leaves little room for in-depth negotiation, with reports that the large scale deadline issue is to push states into accepting which they may not like which in turn will break their economic control. The issue of the all-or-nothing choice is a large step towards economic coercion in international affairs.
Conclusion: Trade War Intensification Threatens Global Economic Stability
Trump’s aggressive trade war move via the imposition of 25% tariffs on Japan and South Korea is a large scale issue for global economic stability and international cooperation. Also, his tough tariff policy which has hit 14 countries with as much as 40% is putting at risk long standing trading relationships and see-through of economic integration which we have had for decades.
The in-your-face attack on our key allies Japan and South Korea displays the wide scale impact of Trump’s trade strategy; also the BRICS penalties put forth by him speak to his large scale economic war plans. As we approach the August 1st deadline the brutal economic results will see American consumers’ savings depleted, international relationships broken and multilateral trade cooperation which took years to build destroyed.
The large scale increase in tariffs we see today is at a historic crossroads in global economic interaction, with this shift toward protectionism putting us on track for the worst trade dispute since before the Great Depression. As the markets react to the tough news reports, it is very much out into the open that this—which we may call the 2018 trade issue—is going to have very large scale impact on global economic health which in turn will mar any progress in economic growth and stability worldwide.
News Source: Reuters english.cw.com economictimes
