Trump tariffs take effect, signaling trade shift

U.S. President Donald Trump signed an executive order on July 31 imposing reciprocal tariffs on 68 countries and the European Union. The order takes effect at 12:01 a.m. Eastern time on Aug. 7, or 1:01 p.m. in South Korea. The high tariffs Trump declared on what he called “Liberation Day” in April will now go into effect.

The move is seen as marking the end of the multilateral free trade system led by the United States since World War II and the rise of a new global trade order based on protectionism. Observers say it represents the full implementation of Trump’s country-specific tariff framework. South Korea, which concluded a trade agreement just one day earlier, will face the same 15% tariff rate imposed on Japan and the European Union.

In the executive order, President Trump stated that the U.S. trade deficit poses a serious threat to national security and the economy, saying, “The cause lies entirely or mostly abroad.” He later wrote on Truth Social, “Tariffs are making America great and rich again,” boasting of the policy’s impact.

Notably, Trump included a provision for a 40% punitive tariff to block transshipping, in which goods are routed through third countries to reach the United States. The Wall Street Journal reported that the measure is aimed at China, which is known to use such practices, and at key Southeast Asian countries that serve as transit hubs for Chinese exports.

Key U.S. trading partners, including India, Canada, Brazil, China, and Mexico, have yet to finalize trade agreements with the Trump administration in its second term. China is set to resume negotiations on Aug. 12, while Mexico is scheduled to hold talks on Oct. 29.


Jin-Woo Shin niceshin@donga.com