Stocks tumble after Trump announces 25% tariffs on Japan and South Korea

Stocks tumble after Trump announces 25% tariffs on Japan and South Korea

Stocks are down. Take a look there as President Trump announces new tariffs 25% on both Japan and South Korea. They’re the first of dozens of new tariffs. The white House is expected to announce in the coming days as the president pressures trade partners to negotiate new deals, hopefully by his July 9th deadline. But it sounds like he’s planning to stretch that out until August 1st. Now let’s get straight to CNN’s Matt Egan. Matt, what are you learning? Well, Jessica, this is just the latest twist in what has already been a very confusing trade war, full of stops and starts, delays and deadlines. And, look, U.S. markets, they fell sharply the moment that these letters announcing the tariffs on Japan and South Korea came out. You see, the Dow is down 520 points, about 1.2%. The S&P and the Nasdaq are also down about 1%, backing away from the all time highs that were set at the end of last week. And we are seeing even steeper losses for Japanese automakers Nissan, Toyota and Honda, all of them down about 3 to 4% on this news. Now what stands out to me really are two things from this tariff announcements. One, that the 25% tariff on Japan and on South Korea. This really takes things back to where they were back on Liberation Day. Right. That’s when the president announced those April 2nd, very high tariffs that unnerved investors. And at that point South Korea was at 25%. And it’ll stay there according to this letter. And Japan was 24% there. And it would go up slightly to 25%. The other thing that really stands out, though, from these letters that the president sends, is the timing, right? The tariffs do not take effect immediately. I think there had been some concern that the tariffs would be taking effect as soon as this week is July 9th, since we had this deadline coming up from the 90 day pause. But instead now the president says the tariffs will take effect on August 1st. And so that does buy some time here for the administration to potentially negotiate or perhaps even just kick the can further down the road. Take a listen to administration officials over the weekend explaining their thinking around these new deadlines. If we have not reached an agreement, then you will go back to the April 2nd level, starting when? August 1st on the first. Okay, so there’s basically a new deadline. Afraid. Do they change on July 9th or August 1st? They’re going to be tariffs aggressive are going to be the tariffs I think what most countries done by July now is either a letter or a deal. But the just they go into effect on August 1st. Now all of this I think just feeds the uncertainty that has just made it really, really hard for businesses to plan, especially businesses that are importing from other countries. Veteran policy strategist Greg Valliere, he put out a note saying, we’re back to confusion. It’s not clear when tariffs will take effect, as President Trump and cabinet officials seemingly returned to the head spinning, ad hoc policies that upset markets in the spring. I think the bottom line here, Jessica, is it looks like tariff uncertainty is here to stay. And the longer it’s here, the greater the damage it’s going to do to the economy. All right. Matt Egan with the very latest on on this ever changing picture. Thank you so much. Today a threat and a new deadline. The president’s treasury secretary is warning the rest of the world that they have an ever shrinking window to secure trade deals. Scott told me yesterday here on CNN that the administration is putting 100 letters in the mail cautioning smaller countries that tariffs will revert to their April 2nd rates at the end of this month. It’s not a new deadline. We are saying this is when it’s happening. If you want to speed things up, have at it. If you want to go back to the old rate, that’s your choice. When we send out 100 letters to these countries that will set their tariff rate. So we’re going to have a hundred done there in the next few days. And that’s not a deal. That’s a threat. No, that’s the level that that’s the deal. A panel is back and we were told that the letters would go out around noon eastern, which is 20 minutes ago. Maybe they did. We don’t have any word about it, but it just kind of broadening widening the aperture, if you will. This uncertainty, which is part of what I got to with the Treasury Secretary yesterday, is a big, big challenge for businesses across the world, never mind the American businesses that the president cares a lot about without question. And the uncertainty really has been the only throughline of all of these on again, off again whiplash tariff policies. The president has impacted. Now, white House officials will say and point out, and rightly so, at least, largely, is that prices have not gone up, exponentially so because of these tariffs. Now business small business owners will say it’s the uncertainty that is really hurting them much more than bigger businesses. Walmart, of course, a few months ago, said it was going to have to raise prices. The administration and the president, went hard after them. And then so other companies really, backed off and didn’t do it. But look, going forward here, it is an uncertain, phase, like what is coming next. One thing that is certain, the ease of which, Howard, let Nick and Secretary Besson and others a suggested, it would be to reach these deals. They said 90 deals in 90 days. It just didn’t come to pass. So we’re, near the end of that timeline here, and these letters are going out. The president absolutely flipped the script by saying, you know, we can’t possibly do all these deals individually with countries. Now, we’ll just send up these letters completely different than what they said in April. And I think that gets to what Jeff is saying. One of the problems here is the credibility of the white House, because you can’t trust what the white House says about these, the purpose of the tariffs, when deals are going to be done, how easy it’s going to be for deals to be done. So it’s saying one thing and then a few weeks or months later they’re saying something completely different. The white House has contradicted itself repeatedly when it comes to the purpose of the tariffs. And when these deals with all these countries are going to get done. Now, so far, doesn’t seem to have, hurt the white House much that this is perhaps another example where there’s not been a consistent message, but maybe it could. I think American people are starting to get confused. Yeah. I mean, it is true that we have not seen evidence of inflation or high or higher prices because of this. It’s also true that there’s been a pause and the market, you know, what went went down. And then it came up during. And because of that pause. So we don’t know what we don’t know. Well, it’s it’s part of the economy. It’s also hard for businesses to to plan beyond 90 days and then another 90 days and then maybe two weeks, because usually they’re two weeks or 90 days of the administration where they’re and then they bump in another 90 days or two weeks. It’s hard to run a business like that when you’ve got to be thinking about what you’re going to order for Christmas and, and, and down the line. That’s what we’re hearing from businesses in New England and beyond. I don’t know, for some of these folks, it’s too late to fix that. and what happens, you know, going into the next year, we’ll have to see. But you need to your point, Dana, during that interview, the uncertainty is the problem. And none of this really fixes that. And, you know, in some ways you can kind of see, the tail chasing the dog. And by that I mean people in and around the president, some of whom are like minded in the belief that tariffs are important, some of whom may not be as, as wedded to that, to that policy, are trying to figure out how to implement tariffs that Donald Trump, the private citizen, has wanted since he, since we ever heard anything that he said, you know, in the 80s, this is something that has been consistent. He is determined to keep on this, and they’re still trying to figure out how to make that desire a viable policy. Right? I mean, this has been a consistent, message of his or belief of his, since the 80s. But it’s different to have that belief as a private citizen and whatnot, as a president and have this be like the driving part of your economic policy. We also have not heard the white House really talk about tariffs are going to, pay for, the, huge legislation that was passed last week. I mean, that has effectively gone out the window. So maybe they’ll start talking about it more this week. But it was intended to be this massive revenue source that, it’s been a long time since they’ve talked about that. That’s a good point.

President Donald Trump cranked up the pressure on two of America’s key trading partners, Japan and South Korea, firing off letters Monday to the heads of their countries that informed them of their new tariff rate. Both countries will face a 25% tariff come August 1, Trump said in posts on Truth Social displaying the letters, potentially giving countries more time to negotiate deals. CNN’s Matt Egan report. #CNN #News