Trump begins sending trade letters, targets Japan and South Korea first

President Donald Trump announced Monday that the U.S. will impose a 25% tariff on all imports from Japan and South Korea, starting August 1. The levy applies to every category of goods from both countries.

On Truth Social, Trump posted screenshots of letters addressed to Japanese Prime Minister Ishiba Shigeru and South Korean President Lee Jae-myung. Each letter details a 25% tariff, separate from other duties. Goods rerouted through third countries to avoid higher charges will also face increased rates.

The White House has sent trade letters to 12 more countries.

President Trump begins hitting trade partners

The letter to Japan opens by highlighting the close trading relationship despite a persistent deficit and invites Japanese firms to tap the vast U.S. domestic market.

It notes that all imports will incur the 25% levy alongside any sector tariffs. The document adds, “Goods transshipped to evade a higher Tariff will be subject to that higher Tariff.” It offers no tariff on products built in the U.S. and promises approvals “in a matter of weeks.”

An almost identical letter was sent to South Korea. It praises the trade ties, notes the deficit and calls for fairer exchange. The 25% tariff will apply to all Korean goods in addition to sector duties. The note repeats the transshipping warning and the no-tariff offer for items made in the U.S. It adds that any rise in Korea’s own duties will be added on top of the 25%.

Markets dip ahead of more trade announcements

Stocks dipped around midday Monday after the announcements, as investors worried about the new tariffs and possible backlash from Japan or South Korea.

The Dow fell 447 points (about 1%), the S&P 500 dropped 0.8%, and the Nasdaq slipped 0.9%. Toyota and Honda shares fell about 4% after Trump’s news. AMD and Nvidia dipped a little, and Apple and Alphabet dropped just over 1%.

The latest duties will kick in on August 1 and would stack on top of any retaliatory levies. Treasury Secretary Scott Bessent told CNBC to expect more trade announcements within 48 hours and said it “will be a busy couple of days.”