Trump’s Tariff Letters Signal Shift in U.S. Trade Policy Approach

Updated July 8, 2025 at 5:49 PM EDT

In a move that challenges traditional trade practices, President Trump has initiated a series of tariff threats against global trade partners, communicated through both official letters and social media announcements. This approach marks a significant shift in U.S. trade policy.

On Monday, Trump shared letters on Truth Social addressed to the leaders of Japan and South Korea, indicating his intention to implement new tariffs on their exports to the United States starting August 1. These were the first of several communications, with twelve more letters issued that outlined specific tariff rates for various countries. This was followed by an executive order delaying a previously set deadline for tariff agreements from July 9 to August 1.

Despite previous commitments by Trump and economic officials to establish numerous tariff agreements by July 9, only two agreements—with the UK and Vietnam—have been finalized. Trump has attempted to redefine these letters as tariff agreements, stating in a Cabinet meeting, “A letter means a deal.”

Trump’s administration is currently engaged in tariff negotiations with several nations, though the method involves issuing standard letters that detail new tariff rates for each country. According to Trump, this general approach is both effective and efficient: “We can’t meet with 200 countries. We have a few trusted people that know what they’re doing, that are doing a good job, but you can’t do it. You have to do it in a more general way. But it’s a very good way. It’s a better way. It’s a more powerful way.”

This initiative is a departure from the U.S.’s historical trend toward free trade agreements, such as NAFTA and bilateral agreements, according to Douglas Irwin, an economics professor at Dartmouth University. Historically, tariffs were used sparingly, mainly to protect specific sectors or in response to dumping or national security concerns.

Trump’s preference for bilateral agreements or unilateral tariff imposition contrasts sharply with multilateral trade agreements like the Trans-Pacific Partnership, which involved lengthy negotiations and complex terms including labor and environmental standards. Trump’s focus is primarily on tariff rates and trade deficits.

Trump argues that these tariffs could encourage other countries to reduce their trade barriers, potentially opening up markets for U.S. exports. He also suggests that an increase in U.S. manufacturing is a key goal, though many economists remain doubtful about this outcome.

The financial burden of tariffs is immediate for U.S. companies, which often pass additional costs onto consumers. For example, the recent agreement with Vietnam sets tariffs at 20%, down from 46% imposed earlier in April, yet still significantly higher than the pre-Trump era average of 3%. This change is likely to increase the cost of Vietnamese imports, including machinery and clothing, for American consumers.

What Trump has announced so far

In the letters posted to social media, Trump emphasized that the U.S. continues to engage with countries despite “a significant Trade Deficit.” The letters express dissatisfaction with the imbalance, stating, “Our relationship has been, unfortunately, far from Reciprocal.” White House press secretary Karoline Leavitt indicated that additional letters are forthcoming and noted that the existing letters are almost identical, altering only the country names and tariff rates. (For a comprehensive list of the announced tariff rates, click here.)

The administration clarified that these new tariffs won’t be compounded with existing ones on broader categories, like steel and aluminum, which remain at 50% globally.

Despite Trump’s rhetoric implying that tariffs are shouldered by other countries, they are actually taxes on U.S. companies importing goods, often resulting in increased consumer prices. Trump has framed these tariffs as a response to protectionist policies from other nations.

The letters also state that goods transshipped through the listed countries will incur higher tariffs, and if any country reciprocates with tariffs on U.S. goods, Trump warned, “whatever the number you choose to raise them by, will be added onto the 25% tariff that we charge.”

Trump has proposed that countries could sidestep these tariffs by relocating production to the U.S., though the letters provide little insight into how else countries might mitigate these tariffs.

Douglas Irwin from Dartmouth noted, “If you look at all the letters that were issued yesterday, they were extremely broad brush. They don’t say, ‘We don’t like this one aspect of what you’re doing. Get rid of it or we’ll retaliate.’ “

A brief history of Trump’s recent tariff talk

The new tariff letters follow a period of uncertainty subsequent to Trump’s April 2 executive order, which imposed tariffs on numerous countries. This announcement, made during a Rose Garden event, labeled the day as “Liberation Day” and set high tariffs on goods from major U.S. trade partners. A week later, following market upheavals and economic warnings, Trump reduced these tariffs to 10% for 90 days, calling it a “pause,” with the intention to revert back on July 9.

Throughout this period, Trump vowed to negotiate individual tariff deals by July 9, ambitiously aiming for “90 deals in 90 days.” However, only two deals have been achieved, with the UK in early June and with Vietnam on July 2.

Most of the newly announced tariff rates align closely with the rates set in April, except for Cambodia, whose tariffs were adjusted from 49% to 36%.

A look at the new tariff rates outlined in Trump’s letters to global leaders

The new tariff rates included in the letters so far are:

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