Updated July 7, 2025 at 3:18 PM EDT
President Trump has announced a new wave of tariffs targeting exports from seven countries, effective August 1. This move, communicated through letters shared on social media, affects Japan, Kazakhstan, Laos, Malaysia, Myanmar, South Africa, and South Korea. Trump stated, “the United States of America has agreed to continue working with” these nations despite a “significant Trade Deficit,” citing a lack of reciprocity in trade relations as the reason for the tariffs.
Karoline Leavitt, White House press secretary, indicated that approximately 14 letters would be dispatched on Monday, with more to follow. The letters, virtually identical except for specific country details and tariff rates, signal Trump’s intent to extend a deadline for trade negotiations from July 9 to August 1 via executive order.
The announced tariffs are not additional to existing ones, such as the 50% tariffs on steel and aluminum globally. Despite Trump’s framing of tariffs as costs borne by other countries, they are actually taxes paid by U.S. companies on imports, often leading to higher consumer prices domestically.
Trump’s communications specify that goods merely passing through these countries will incur higher tariffs, with potential reciprocal tariffs from these countries resulting in further tariff increases by the U.S. However, goods manufactured in the U.S. by these countries’ companies could sidestep the new tariffs.
Background on Trump’s Tariff Strategy
The recent tariff letters follow an April executive order imposing tariffs globally, which Trump dubbed “Liberation Day” during a Rose Garden event. Initially, high tariffs affected major trading partners like Vietnam and Japan. A week later, following economic warnings, the tariffs were temporarily reduced to 10% for 90 days, set to rise again on July 9.
Trump aimed to secure “90 deals in 90 days,” but only two deals have materialized, with the UK in June and Vietnam in July. Notably, Laos will see a tariff reduction from 48% to 40% compared to earlier levels.
Trump’s Unconventional Tariff Approach
The rapid imposition of high tariffs and their announcement via social media marks a departure from traditional trade practices. Trump opts for bilateral agreements, using the U.S. economy’s size to influence negotiations, rather than multilateral deals like the Trans-Pacific Partnership, which he exited in 2017.
While these tariff strategies aim to reduce trade barriers faced by U.S. exporters, they also impose costs on U.S. companies, likely affecting consumers. For instance, the Vietnam trade deal sets a 20% tariff on Vietnamese goods, a reduction from April’s 46% but significantly higher than pre-Trump levels of around 3%.
Scott Lincicome from the Cato Institute notes, “U.S.-Vietnam trade restrictions would today be very, very low if Trump hadn’t walked away from TPP in 2017,” highlighting the complexities of achieving Trump’s trade objectives through bilateral agreements.
Copyright 2025 NPR
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