US to impose 25% tariffs on Japan, South Korea on Aug. 1

President Donald Trump on Monday announced the U.S. will impose 25% tariffs on goods imported from Japan and South Korea.

Trump shared letters addressed to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae-myung in posts on Truth Social.

The new levies will take effect on Aug. 1. If either Japan or South Korea raise tariffs in retaliation, Trump said in his letters that the U.S. tariffs will increase by an equal amount.

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Japanese Prime Minister Shigeru Ishiba speaks during a news conference in Tokyo, Japan. | Getty Images

Stocks reacted to the announcement, with the Dow Jones Industrial Average falling more than 500 points, or 1.1%, to a session low while the S&P 500 and Nasdaq Composite each dropped 0.9%.

Trump’s letters said it is a “Great Honor to send you this letter in that it demonstrates the strength and commitment of our Trading Relationship,” and that the U.S. has agreed to continue to work with Japan and South Korea “despite having a significant Trade Deficit” with each country.

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

He went on to tell Japan and South Korea that “there will be no Tariff” if companies in those countries “decide to build or manufacture product within the United States and, in fact, we will do everything possible to get approvals quickly, professionally, and routinely – in other words, in a matter of weeks.”

Trump shared letters addressed to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae-myung in posts on Truth Social. (Tasos Katopodis/Getty Images / Getty Images)

“We look forward to working with you as your Trading Partner for many years to come. If you wish to open your heretofore closed Trading Markets to the United States, and eliminate your Tariff, and Non Tariff, Policies and Trade Barriers, we will, perhaps, consider an adjustment to this letter,” Trump added.

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“These Tariffs may be modified, upward or downward, depending on our relationship with your Country. You will never be disappointed with The United States of America,” Trump wrote.

In April, Trump announced a “reciprocal” tariff policy under which U.S. tariffs on goods imported from foreign countries would be based on the size of America’s bilateral trade deficit with those countries.

In April, Trump announced a “reciprocal” tariff policy during an event dubbed “Liberation Day.” (Chip Somodevilla/Getty Images / Getty Images)

Under the reciprocal tariffs announced at the so-called “Liberation Day” event, imports from Japan would face a 24% tariff while goods from South Korea would have a 24% tariff applied to them – figures that are largely in line with the 25% tariffs the president announced in his letters.