On July 7, Trump reignited trade war tensions by threatening tariffs on exports of over a dozen countries on August 1. These countries included allies and partners such as Japan, South Korea, Malaysia, and Indonesia.
Trump yet again delayed tariffs that were supposed to be imposed on July 9, fearing feedback from the stock market and consumption numbers. In the meantime, he has sent threatening letters to Japan and South Korea:
In nearly identical letters to the president of South Korea and the prime minister of Japan, Mr. Trump wrote that the countries would face a 25 percent tax on their exports next month, adding that “we have decided to move forward with you, but only with more balanced, and fair, TRADE.”
“Please understand that the 25 percent number is far less than what is needed to eliminate the trade deficit disparity we have with your country,” he wrote.
The New York Times
Trump vaguely called Japan “spoiled” due to trade imbalances in sectors such as automobiles and rice. However, Japan has offered to help the United States with critical issues such as shipbuilding, and to buy more energy and defense materials.
Economists have concurred that extending the July deadline has fed into uncertainty for many businesses, especially as they relate to hiring and investment.
It is vital to note that Trump’s proposed tariffs are illegal. As there is no emergency, Trump is unable to invoke the 1977 International Emergency Economic Powers Act to unilaterally tariff other countries. Congress has the ability to impose tariffs.
