Trump's Tariffs: the long-awaited letters of warning have arrived, with European markets closed but Wall Street still open and immediately affected by the situation. Donald Trump which set the new tariffs decided by the White House. We started with Japan and Korea: In nearly identical missives to the leaders of Japan and South Korea, the US president said the tariffs would apply starting in August and at rates to 25%. If an agreement is not reached first, theAugust 1th US customs will therefore begin to collect the amount established in the letter. However, US Treasury Secretary Scott Bessent immediately made it clear that several agreements will be announced in the coming days, and that he had already received many proposals in the last few hours alone. Washington also explained that all trade tariffs, including those previously communicated and theoretically due to expire on July 9, are still postponed to August 1st.
The letter to Japan and Korea and other countries
"If for any reason," Trump wrote in a threatening tone as usual in his letter to the two Asian countries, "you decide to increase your tariff measures, then whatever number you choose to raise them will be added to the 25%. The goods transferred (transhipment) to avoid higher duties will be subject to that higher tariff. If, on the contrary, you wish to open up your hitherto closed markets to the US, eliminate your tariff and non-tariff measures, trade barriers, perhaps we could consider an adjustment to this letter," the US president concludes in both documents. Rates may be subject to change, up or down, based on our relationship with your country. You will never be disappointed by the United States of America.”
The same tenor was also expressed in the letters, subsequently published in Truth, sent to other countries such as South Africa (30% duty), Malaysia (at 25%), Kazakhstan (at 25%), Laos (at 40%), Myanmar (at 40%). Note that several of these countries are part of theBRICS area, which met in recent days in Rio de Janeiro and which had expressed strong opposition to trade taxes, to the point that Trump had threatened the bloc of former emerging countries to apply 100% duties on them. From BRICS Summit in Brazil the president in office Lula had also harshly criticized the US president: "It is irresponsible for a country like the United States to threaten its partners through social networks. We are sovereign countries, we do not want an Emperor".
Europe still negotiating: working on a basic duty of 10%
As far as Europe is concerned, the framework agreement with the US on trade matters that the EU is working on provides for a basic duty of 10%, with some exceptions, as for airplanes and alcohol. This is what the Commission explained to the permanent representatives of the member states gathered in Coreper this evening in Brussels, a European diplomatic source told AdnKronos. Ultimately, however, everything depends on the will of the president.
The Commission's analysis, the source continues, is that it seems that it is a question of accepting either asymmetry in tariffs (i.e. unilateral US tariffs, not counterbalanced by EU tariffs) or unpredictability. At the same time, the Commission has admitted that there are no commitments that prevent future US tariffs or further concessions under theFramework Agreement. It therefore appears that Trump is not expected to send letters to the EU today, which should give more time to reach a framework agreement, potentially by the end of this week.
The market reaction
Meanwhile, in Europe, the markets had closed with cautious optimism, all above parity except London. After the announcement, as mentioned, Wall Street quickly lost ground: before 19 pm Italian time the Dow Jones lost about 1%, the Nasdaq retreated by 0,78% and the S&P 500 recorded a decline of 0,76%. Subsequently, before the closing of the American stock exchange, the indexes increased their losses, all three sinking by well over one percentage point. The dollar instead strengthens further, with the euro falling rapidly to 1,1689 against the greenback. The pound also weakens to 1,3596 and the Swiss franc to 1,2519. Among other consequences on the markets after Trump's announcement, it is also worth mentioning the prices of treasury bonds U.S. continues to fall: in the Italian evening the yield – which moves inversely to the price – of the ten-year is up to 4,381% from 4,340% yesterday. The yield of the three-month bond is little changed at 4,361%.
