New Delhi: American President Donald Trump has taken aim at allies Japan and South Korea along with a further dozen countries including Bangladesh, promising to introduce steep tariffs on 1 August, unless they all agree to trade deals with the US.
Trump has sent letters to the leaders of nearly 15 countries, extending the deadline for them to complete a trade deal by roughly three weeks.
The letters sent Monday have promised additional tariffs from 25 percent to 40 percent on countries such as Bosnia and Herzegovina, Thailand, Cambodia, Laos, Serbia, Indonesia, Tunisia, Myanmar, South Africa, Kazakhstan, and Malaysia apart from the three aforementioned nations.
“It is a Great Honor for me to send you this letter in that it demonstrates the strength and commitment of our Trading Relationship, and the fact that the United States of America has agreed to continue working with Japan, despite having a significant Trade Deficit with your great Country. Nevertheless, we have decided to move forward with you, but only with more balanced, and fair, TRADE,” the letter to Japan Prime Minister Ishiba Shigeru said.
The letter added: “Therefore, we invite you to participate in the extraordinary Economy of the United States, the Number One Market in the World, by far. We have had years to discuss our Trading Relationship with Japan, and have concluded that we must move away from these longterm, and very persistent, Trade Deficits engendered by Japan’s Tariff, and Non Tariff, Policies and Trade Barriers.”
The content of the letters was almost identical. The letters extended the deadline for trade negotiations to 1 August from the current deadline of 9 July. The American President had introduced “liberation day” tariffs of 10 percent on every country. Trump further announced specialised additional tariffs on a number of countries, above the baseline duties, to rebalance America’s trade deficit with the world.
However, due to the response of the markets, Trump paused the additional tariffs for three months, giving the countries a window to negotiate a deal. The window has now been extended to 1 August, according to White House Press Secretary Karoline Leavitt.
“And weeks ago, I stood at this podium and I told all of you that the president was going to create tailor-made trade plans for each and every country on this planet, and that’s what this administration continues to be focused on,” Leavitt said at a press briefing Monday.
The White House Press Secretary added: “The president will also sign an executive order today, delaying the 9th July deadline to 1st August. So the reciprocal tariff rate or these new rates that will be provided in this correspondence to these foreign leaders will be going out the door within the next month or deals will be made, and those countries continue to negotiate with the United States.”
In the letters, Trump highlighted the new additional tariffs on Japan and South Korea, to be at 25 percent. Thailand has been threatened with 36 percent additional tariffs, while Malaysia, which was originally threatened with 24 percent reciprocal tariffs in April, now will see it increase to 25 percent, if a deal is not completed by the deadline date.
Bangladesh will see an additional tariff of 35 percent. The biggest change in the additional tariff is Cambodia. In April, the White House announced that the South East Asian nation will face 49 percent tariffs on all its goods imported to the US. In his letter Monday, Trump announced that the new tariff rate would be at 36 percent.
India has been negotiating a mini-deal with American authorities to be announced before the original 9 July deadline. However, no announcement has been made yet, given that there are differences between the two countries on a number of issues including the opening of the agricultural sector by India for American products.
The mini-deal is set to be different from the original first tranche of a bilateral trade agreement between India and the US, which was promised to be announced before the fall of this year, by Prime Minister Narendra Modi and Trump in February.
(Edited by Tony Rai)
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