Trump Slaps Japan & South Korea with 25% Tariffs—Trade Wars Escalate in 2025

Trade tensions hit boiling point as the US fires another protectionist salvo.

Markets brace for impact

The 25% hammer drops on two key Asian economies—just as global supply chains were recovering. Analysts predict immediate yen and won volatility, with crypto markets likely to absorb spillover capital flows (as usual).

Tech sector in the crosshairs

Semiconductor and automotive exports face immediate pressure. Watch for supply chain workarounds—and the inevitable 'innovation through adversity' PR spin from corporate boards.

Finance jab
: Wall Street already pricing in the next tariff reversal—because nothing says 'stable investment climate' like policy whiplash.

The letters also contained a warning that if Japan or South Korea chose to retaliate by increasing their own import taxes, the U.S. WOULD further increase its tariffs. However, Trump encouraged both countries to manufacture goods in the United States to avoid further tariffs. This move comes after a period where some tariffs were temporarily reduced to allow for negotiations, with a previous deadline for their reimposition looming. The tariffs will take effect on August 1.

“Please understand that the 25% number is far less than what is needed to eliminate the Trade Deficit disparity we have with your Country,” Trump says in both letters. “There will be no tariff” if South Korea or Japan or “companies within your Country, decide to build or manufacture the product within the United States and, in fact, we will do everything possible to get approvals quickly, professionally, and routinely-In other words, in a matter of weeks,” he added.

Further Tariff Threats Harm US Stock Market

In addition to the Japan and South Korea tariffs, Trump announced an additional 10% tariff on any country aligning with BRICS nations and their “anti-American policies, ” escalating global trade tensions in 2025 and also triggering immediate market volatility. Trump has threatened to send more letters out to heads of countries ahead of his looming 12:01 a.m. ET, July 9 deadline for countries to make deals or face the threat of higher tariffs. That date marks the end of the pause on “reciprocal” tariffs, which briefly went into place in April.

The US stock market fell further after Trump’s announcement. The Dow was down as much as 530 points, or 1.2%, on Monday. Meanwhile, the S&P 500 fell 0.87% and the Nasdaq fell 0.9%.