Trump sends tariff letters, placing 25% levies on top allies
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President Trump holds a signed executive order on "Liberation Day." Photo: Andrew Harnik/Getty Images
The U.S. started imposing tariffs by letter to a variety of countries, pairing new rates with an explicit warning that even those could change at any time.
Why it matters: After months of threats, President Trump is abruptly re-escalating the trade war.
- For businesses craving certainty, who've had a period of relative calm, the move could once again upset that balance.
- It also injects a new risk into financial markets that have largely already moved on to a post-tariff world.
Driving the news: Trump posted copies of the letters to Truth Social on Monday, starting with South Korea and Japan, both of which were hit with 25% tariffs, effective Aug 1.
- Those tariff rates are similar to what the White House announced on the April 2 "Liberation Day," before swiftly pausing the implementation for 90 days.
- He later posted similar letters to Myanmar (40% tariff), Laos (40%), Thailand (36%), Cambodia (36%), Serbia (35%), Bangladesh (35%), Indonesia (32%), Bosnia & Herzegovina (30%), South Africa (30%), Kazakhstan (25%), Malaysia (25%) and Tunisia (25%).
Trump continued to publish similar letters on Wednesday, detailing the tariff rates for smaller trading partners including Libya, Iraq and Algeria — all of which were assigned tariff rates of 30%.
- He also published a letter to the leaders of Moldova and Brunei, assigning each a tariff rate of 25%, while the Philippines will see a tariff of 20% on its U.S.-bound exports.
The intrigue: Many rates were slightly lower than April, or unchanged; Malaysia's was 1 percentage point higher.
- Cambodia was the big "winner," with its rate dropping 13 percentage points from the original target.
What they're saying: "If you wish to open your heretofore closed Trading Markets to the United States, eliminate your tariff, and Non Tariff, Policies and Trade Barriers, we will, perhaps consider an adjustment to this letter," both the letters to the South Korean and Japanese leaders say.
Zoom in: Trump told reporters at the White House on Monday that the Aug. 1 deadline was "firm but not 100% firm," adding the U.S. would be open to listening to offers from other countries.
What to watch: Trump threatened to up the ante if countries threatened to retaliate.
- "If for any reason you decide to raise your tariffs, then, whatever the number you choose to raise them by, will be added onto the 25% that we charge," the letter addressed to Japan reads.
- There is similar language in the letter to South Korea and others.
- The letters also end with an ominous warning for those craving some sort of finality: "These Tariffs may be modified, upward or downward, depending on our relationship with your Country."
By the numbers: Markets initially sold off to hit session lows on the news, rebounded, and then dropped off again.
- The S&P 500 fell 0.8%, while the small-cap Russell 2000 — whose constituents are more vulnerable to tariff costs — fell 1.6%.
Madison Mills contributed reporting.
Editor's note: This story has been updated with additional comments by President Trump.
