Trump hits 14 countries with tariffs, extends deadline to August 1

Donald Trump has breathed fresh life into his global trade war by publishing letters he sent to 14 nations – starting with Japan and South Korea – revealing he will impose higher tariff rates.

Donald Trump has started publishing his tariff letters on Truth Social. Picture: AFP.

Anthony Albanese is warning the US will suffer from Donald Trump’s move to breathe fresh life into a global trade war, declaring that tariffs are “a penalty on the country that is imposing them.”

The warning from the Australian Prime Minister came after the US President published letters to 14 nations – starting with Japan and South Korea – in which he threatened higher tariff rates, effective from August 1.

With the threat of tariffs gearing up once again in Washington, the S&P 500 fell 0.8 per cent while both the Nasdaq Composite and Dow Jones Industrial Average dropped 0.9 per cent.

Mr Trump opted to hit Tokyo and Seoul first with tariff rates of 25 per cent. But other nations also face higher tariff rates from August 1 including Myanmar and Laos (40 per cent); Thailand and Cambodia (36 per cent); Serbia and Bangladesh (35 per cent); Indonesia (32 per cent); Bosnia and Herzegovina and South Africa (30 per cent), and; Tunisia, Kazakhstan and Malaysia (25 per cent).

Mr Albanese said prices in Australia would not increase and noted that tariffs were “a penalty on the country that is imposing them because what they require is for goods to be purchased with a tax on top.”

“The US has made that decision,” he said. “Australia has a tariff rate of 10 per cent which is at least as low as any country in the world. No country has a better deal than Australia.”

“We’ll continue to put our case that tariffs are an act of economic self-harm and that we should be entitled to reciprocal tariffs which is zero.”

An extension to the 90-day pause on reciprocal tariffs had been expected by the Albanese government, which is captured by the Trump administration’s general 10 per cent tariff as well as its higher 50 per cent tariffs on steel and aluminium.

The White House’s expectation is that Canberra’s 10 per cent tariff rate will remain unchanged, although any final decision will be taken by the President. The Australian was told that Mr Trump could chose to increase the tariff rate on Canberra if he believed it was necessary.

In the 14 letters sent on Tuesday by Mr Trump – all of which were posted in full on Truth Social – the US President said the nominated tariff rate could be adjusted upward or downward “depending on our relationship with your country”.

He warned nations against retaliation, declaring any decision to raise tariffs on the US would only force the administration to increase their tariffs by an equivalent amount – an outcome that would ignite an escalating tit-for-tat trade war.

In the case of each nation, Mr Trump said the outstanding trade deficits the US had with them were a “major threat to our economy and, indeed, our national security”.

The US President told each nation it was a “great honour for me to send you this letter in that it demonstrates the strength and commitment of our trading relationship”.

He promoted the decision of the administration to “continue working” with each country despite the US running a trade deficit.

“Nevertheless, we have decided to move forward with you, but only with more balanced, and fair, TRADE,” he said. “Therefore, we invite you to participate in the extraordinary Economy of the United States, the Number One Market in the World, by far.”

In the case of each nation in receipt of these letters, Mr Trump said the “relationship has been, unfortunately, far from reciprocal”.

He said the tariffs were “necessary” to correct the many years during which non-tariff policies and trade barriers had been imposed by each nation.

“This Deficit is a major threat to our Economy and, indeed, our National Security!” he posted.

Mr Trump initially announced the new regime of reciprocal tariff rates on April 2 – dubbed “Liberation Day” – but then paused them for 90 days to allow nations to strike better deals with the US.

The pause was initially due to end on July 9 but has now been extended by an extra 22 days.

US Treasury Secretary Scott Bessent said over the weekend that countries would “boomerang” back to their April 2 tariff rates by the start of August if they failed to negotiate deals with Washington.

White House Press Secretary Karoline Leavitt rejected suggestions on Monday that the deadline was extended because the administration had struggled to negotiate trade deals with other countries.

She instead argued that “this administration is doing what’s best for the American worker”.

“We want the best deals possible for our workers, for our manufacturing base, for our middle class,” she said.

Additional countries will receive letters in the “coming days”, although the White House did not expect a letter to be sent to Australia on Wednesday.

“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,” Ms Leavitt said. “And that’s what this administration continues to be focused on.”

Ms Leavitt said the Trump administration was close to finalising new trade deals with other nations, declaring the US President was looking at “every country on the planet and seeing where they are ripping off the American people”.

“The fact that he has announced a framework with China, a trade deal with the United Kingdom, a trade deal with Vietnam and many others to come in just a matter of six months is truly historic,” she said.

Stan Veuger, senior fellow in economic policy at the American Enterprise Institute, told The Australian he believed the extension of the 90-day pause showed it was “clear the US was not going to reach comprehensive trade agreements with 150+ countries or really with any countries in three months’ time”.

Mr Veuger said that while countries took the threat of US tariffs seriously, they did not “take the specific words, promises deadlines and commitment of the US government seriously”.

Late on Sunday local time, Mr Trump had also threatened an additional levy on countries aligning themselves with the BRICS group of emerging economies, which includes China and India.

“Any Country aligning themselves with the Anti-American policies of BRICS will be charged an ADDITIONAL 10% Tariff. There will be no exceptions to this policy,” Mr Trump posted on Truth Social.

Mr Trump’s statement coincided with the holding of a key BRICS summit in Rio de Janeiro, with Ms Leavitt saying on Monday local time that the US President felt the grouping hoped to “undermine the interests of the United States”.