How disruptive would new tariffs be, both for South Korea and Japan and the US? | DW News

How disruptive would new tariffs be, both for South Korea and Japan and the US? | DW News

Donald Trump has announced that goods from Japan and South Korea will be hit with tariffs of 25% beginning on August 1st. That’s three weeks after the White House’s original deadline for a trade deal with those countries. On his Truth Social site, Trump posted letters he said would be sent to the leaders of both countries warning them not to retaliate by increasing their own their own tariffs or that he would raise the tariffs even more. He also called the US trade deficit with Japan and South Korea a major threat to the US economy and its national security. The letters were to be sent as a 90-day negotiating deadline comes to an end on Wednesday. All right, let’s bring in Ken Moryasu. He’s the diplomatic correspondent in Washington for the publication Nikai Asia. Ken, how should we look at this decision by Washington? Is the administration taking on a more aggressive posture or is it essentially backing off by once again pushing deadlines even further out? Well, yeah, the um pushing back of the deadline is um it shows the fear that Trump and his team have of causing market disruption. But when it comes to the actual negotiations, I think Japan was very surprised that there was very little little leeway uh for for negotiations. The Trump administration was very steadfast on its demands. Japan was the first country to engage in the negotiations in late April. Uh the trade envoy um Akazawa flew to Washington DC and to his surprise, Trump actually invited him to the oval office. uh and they had a long conversation there and since then the Japanese minister has been in Washington seven times uh but um the biggest um sticking point for Japan was the 25% sector specific tariffs on automobiles cars um that they really thought was problematic. Uh the Trump team was willing to negotiate the reciprocal tariffs which was 24% on Japan but considered the auto tariffs as non-negotiable. So there was a sticking point there which they couldn’t overcome until today. How disruptive would these tariffs be both for countries like Japan and South Korea and then also for the US? Yeah. uh the automotive tariffs will be a huge blow uh because about 30% of Japan’s exports to America are cars or auto parts. So this will definitely uh hurt um Japan and it will be the same for South Korea too. The Trump team is explaining that there is a way to avoid uh paying these tariffs and that is to first increase the factory utilization rate of the existing uh Japanese and South Korean auto plants in America or to uh bring in more production to America. But already Japanese and South Korean companies are m have a lot of local production in America. the only cars that they’re bringing in uh for Japan’s case uh are the cars that are a smaller lot and they don’t justify local production but they bring it into America to offer the American consumer more options. Uh what is going to happen is that these will not be able to come. So the American consumer will have less options and they will only be able to buy the Camry and Corollas the mass-producing cars uh that are locally built. Do you see this move today as adding new urgency and possibly opening up the possibility of uh a negotiation? Well, so the biggest point for the Japanese side is that there is a upcoming upper house election on July 20th. And until then, it was very difficult for Prime Minister Sheiba to make major concessions on buying American rice, for instance, because uh the agricultural vote is very important for the ruling Liberal Democratic Party, the LDP. perhaps after the July 20th election until the August 1st election there could uh be some concessions on agriculture. Um but you know it is very difficult um to bring down the trade deficit uh immediately. But just to take a step back in the bigger picture, I think this kind of shows um that Japan had always thought that its geography uh is um critical uh for America and that in countering China uh that Japan is absolutely critical. But it kind of shows that Trump doesn’t see China as an immediate national security threat and he is willing to separate trade and national security. All right, that’s Ken Moryasu, diplomatic correspondent for Nikai Asia. Thank you very much.

Donald Trump has announced that, beginning on 1 August, goods from Japan and South Korea will be subject to tariffs of 25 per cent, three weeks after the White House’s original deadline for a trade deal. He also described the US trade deficit with these countries as a “major threat” to the US economy and its ”National Security”.

Chapters:
0:00 Trump slaps 25% tariffs on South Korea and Japan
0:40 Ken Moriyasu, Nikkei Asia

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