US President Donald Trump has announced 25% tariffs on Japan and South Korea, two of America’s key trading partners. This decision was communicated through letters posted on Truth Social, addressed to the leaders of both countries. Trump says he brought on these tariffs to address what the administration describes as “persistent trade imbalances” with these key U.S. allies.

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.

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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%.