President Trump designated April 2nd as "American Liberation Day" and announced the imposition of reciprocal tariffs. A basic tariff of 10% will be imposed on all countries, and 25% on South Korea, among 57 other countries or economic entities.
The decision sent markets into shock, with stock prices, bonds, and foreign exchange rates all plummeting.
With Treasury Secretary Bessent's persuasion, President Trump announced the reciprocal tariffs on April 9, the effective date.
The Trump administration announced a 90-day moratorium to give trading partners time to negotiate. The first round of reciprocal tariffs was due to expire on July 8th, and no other major agreements have been reached.
President Trump increased pressure on trading partners through "tariff letters," which unilaterally notified them of reciprocal tariff rates, and further extended the effective date of the reciprocal tariffs to August 1.
On July 31, the day before the reciprocal tariffs were to take effect, President Trump issued an executive order amending the reciprocal tariff rates. This order specified the reciprocal tariff rates of 69 countries or economic entities.
The UK, which concluded a trade agreement with the US early on, is subject to the lowest reciprocal tariff rate of 10%, while Syria is subject to the highest reciprocal tariff rate of 41%.
It was also decided that high reciprocal tariffs would be imposed on countries such as the United States (39%) and Switzerland (39%). However, trade negotiations are still ongoing with China, the largest trading partner. The US's "tariff truce" will end on the 11th.
The United States and China decided to extend the tariff truce for another 90 days through ministerial-level negotiations on the 28th and 29th of last month, but President Trump has yet to approve it.
President Trump is also using high tariffs as diplomatic and political pressure against countries such as India and Brazil.
Contrary to President Trump's self-praise that tax revenues have skyrocketed due to his tariff policies,
Some predict that the cost of tariffs will ultimately be borne by Americans. Recently, the Yale Budget Research Institute estimated that the average effective tariff rate in the United States has risen sharply from 2.5% at the beginning of this year to 18.3%.
This figure reflects the mutual tariff rates announced by each country on the 31st of last month. This is the highest tariff rate in 91 years, since 1934.
The Yale Budget Lab estimates that this tax rate will be $2,400 per household in 2025 dollars.
The government explained that this would have the same effect as a decrease in the average household income (approximately 354,000 yen). It predicted that the increase in prices would be particularly large in the clothing sector.
2025/08/07 07:14 KST
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