Trump warns of up to 70 percent tariffs

U.S. President Donald Trump said on July 3 (local time) that he would send letters to 10 to 12 countries on July 4 detailing proposed reciprocal tariffs. He noted that the new tariff rates could range from 10 to 20 percent or go as high as 60 to 70 percent, starting August 1. This move, coming just four days before the expiration of the reciprocal tariff waiver period on July 8, is seen as a pressure tactic to extract faster concessions from countries dragging their feet in trade negotiations.

The South Korean government is preparing for the possibility that it may be included among the recipients of Trump’s letters. In response, the Office of the President dispatched Yeo Han-koo, head of trade negotiations at the Ministry of Trade, Industry and Energy, to Washington on the evening of July 4. The aim is to launch negotiations to eliminate reciprocal tariffs. However, with an early deal appearing unlikely, Seoul is also hoping for an extension of the waiver period.

Speaking to reporters on his way back to the White House from Iowa, Trump said, “The tariffs in the letter will probably range from 60 or 70 percent to 10 or 20 percent.” He added that the letters would all be sent out by July 9, and that the money from tariffs “will start coming into the U.S. on August 1.”

U.S. Treasury Secretary Scott Bessent also warned during an interview with CNBC that some countries are holding off until the last minute in hopes of securing better terms. “They need to be careful,” he said. “Their tariff rates could revert to those announced on April 2.” The Trump administration had previously set a 25 percent reciprocal tariff rate for South Korea.

South Korea’s Ministry of Trade reported to the National Assembly that the U.S. is demanding expanded market access for American agricultural goods, services, and automobiles, removal of digital regulations affecting U.S. firms, stronger enforcement against indirect exports targeting China, and greater investment by Korean companies in the U.S., including purchases of U.S.-produced energy.

Seoul has reportedly made it clear that it will not include the service sector in negotiations. Instead, it plans to protect its sensitive agricultural sector while proposing reduced trade barriers and increased imports of U.S. liquefied natural gas (LNG). A senior government official said, “We are aiming to reduce tariffs or extend the waiver period, but the situation remains highly uncertain,” adding, “We will not rush into a deal at the expense of substantive gains.”

Yeo Han-koo is scheduled to meet with Jamieson Greer of the U.S. Trade Representative (USTR) on July 5 and 6 for trade negotiations.


Jin-Woo Shin niceshin@donga.com