Post by : Meena Ariff

Photo: Reuters

President Donald Trump has decided to delay the planned higher tariffs on imports coming into the United States, but at the same time, he has sent letters to 14 countries, including Japan and South Korea, warning them about the new taxes they might face soon.

Why Did Trump Delay the Tariffs?

Earlier this year, Trump announced very high taxes (tariffs) on products coming from many countries. These tariffs were paused for 90 days to give time for talks and negotiations. This pause was supposed to end this week, but now it has been extended to 1 August.

The President said he was renewing his threat of putting a 25% tax on goods coming from Japan and South Korea. He also shared letters with other world leaders, telling them about the new tax plans.

What Did Trump Say About The New Date?

When a reporter asked Trump if 1 August was a final deadline, he said:

"I would say firm, but not 100% firm. If they call up and say they'd like to do something a different way, we're going to be open to that."

This means he is keeping the date firm for now but is still open to changes if countries are ready to negotiate.

What Do Experts Say About This Move?

Economists explained that trade deals usually take years to finalise. An expert said the delay was expected because:

• These deals are extremely detailed, covering many sectors, products, and taxes.

• For example, Vietnam has made a broad framework deal with the US, but it is not a full trade agreement yet.

Which Countries Received Letters?

Besides Japan and South Korea, Trump has sent letters to 12 other countries, telling them the exact tariff rates they might face:

• 40% tariff on goods from Myanmar and Laos

• 36% tariff on goods from Thailand and Cambodia

• 35% tariff on goods from Serbia and Bangladesh

• 32% tariff on Indonesia

• 30% tariff on goods from South Africa

• 25% tariff on goods from Malaysia and Tunisia

In these letters, he also wrote that the tariff rates could be changed:

"They could go up or down, depending on our relationship with your country."

Why Is Trump Imposing These Tariffs?

Trump believes that imposing tariffs will protect American businesses from foreign competition. According to him:

• It will help US factories produce more.

• It will create jobs for American workers.

• It will make foreign countries negotiate fair trade deals.

What Are The Risks of Tariffs?

Many economists say tariffs can also be harmful because:

• They will increase the prices of goods in the US.

• They will reduce trade between countries.

• Companies like Toyota already saw their US shares fall by 4% after the announcement.

How Important Is Japan for the US?

Japan sent goods worth $148 billion to the US last year. This makes Japan the fifth biggest exporter to the US, after:

1. European Union (EU)

2. Mexico

3. China

4. Canada

South Korea is also among the top 10 countries exporting to the US.

How Did These Countries React?

• Japan’s Prime Minister said he will continue talks with the US to make a deal that benefits both countries. He also said:

"It is deeply regrettable that the US government has announced a further increase in tariffs, in addition to the rates already imposed."

• South Korea plans to use this extra time before August to have more talks with the US to avoid heavy taxes.

• Thailand’s Finance Minister said he is confident that his country can reach an agreement to keep tariffs fair.

What Did Trump’s Team Say?

The White House Press Secretary said more letters might be sent soon. She also said:

"The president's phone rings off the hook from world leaders all the time who are begging him to come to a deal."

This means many countries are calling on him to try to avoid the new taxes.

What Did The Treasury Secretary Say?

The Treasury Secretary said it will be a "busy couple of days" because:

• Many countries are now sending new offers and proposals to the US to avoid these tariffs.

• His mailbox was full of new negotiation offers after Trump’s announcement.

What Happened When Tariffs Were First Announced?

In April, when Trump announced the first set of high tariffs, the financial markets saw big ups and downs. Because of this:

• The President paused some of the highest tariffs to give time for talks.

• However, a 10% tax remained in place for many goods.

Has the US Made Deals With Any Countries?

So far, the US has made:

• A trade deal with the UK

• A broad framework deals with Vietnam

• A partial trade deal with China

But in all these deals:

• Tariffs have increased compared to before Trump returned to the White House.

• Many important trade issues are still not resolved.

What About Other Countries Like India and the EU?

• The US says a deal with India is close.

• The EU is still in talks with the US. Just a few weeks ago, Trump warned the EU that it could face a 50% tax if it did not reach an agreement.

Last week, Trump warned Japan that if it fails to make a deal by Wednesday, it could face tariffs of 30% or 35%.

What Happens Next?

Now, the 14 countries that received tariff warning letters are:

• Holding emergency trade talks with the US

• Trying to make deals before 1 August to avoid these high import taxes.

Meanwhile, businesses, investors, and ordinary people are watching closely to see how these decisions will impact:

• Global trade

• Product prices

• Jobs and the economy in the coming weeks.