25% tariff on Japan, South Korea: Is Trump turning allies into aliens?

With 25 per cent tariffs on Japan and South Korea, US President Donald Trump has continued punishing allies and rewarding traditional adversaries.

Trump on Monday sent out letters to 14 countries to announce new tariffs on them as the waiver on ‘reciprocal tariffs’ announced on April 2 was about to expire.

All of these countries are either treaty allies like Japan and South Korea or major economic partners that supply the United States with modern-day essentials like chips, electronics, and key minerals.

Trump’s practice of punishing allies and rewarding adversaries has put into question his seriousness about the pivot to the Indo-Pacific by withdrawing from the security commitment to Europe. His behaviour risks alienating allies whose cooperation is critical for the United States to not just counter China in the Indo-Pacific but also fulfil on economic and trade requirements.

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In the April 2 rollout, Trump had slapped India with 26 per cent tariff, South Korea with 25 per cent, Japan with 24 per cent, Taiwan with 32 per cent, and Israel with 17 per cent. On the other hand, he did not impose any tariff on traditional adversaries Russia and North Korea and has spared their ally, Iran, with just 10 per cent tariff. He spared these adversaries with any tariffs on Monday as well.

See the list below of the countries that Trump slapped with tariffs on Monday:

Updated list of Trump tariff letters + new rates:

25% Japan
25% Korea
25% Tunisia
25% Malaysia
25% Kazakhstan
30% South Africa
30% Bosnia & Herzegovina
32% Indonesia
35% Serbia
35% Bangladesh
36% Thailand
36% Cambodia
40% Laos
40% Myanmar

— Morning Brew ☕️ (@MorningBrew) July 7, 2025

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The US trade with 14 countries hit with tariffs on Monday stood at $465 billion last year, according to the Department of Commerce.

Japan and South Korea, with whom the United States has mutual defence treaties, account for 60 per cent of this trade at around $280 billion. They are the sixth- and seventh-largest US trading partners.

On the other hand, Trump spared adversaries Russia, North Korea, and Iran, with whom the United States does not important trade ties.

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Other than the risk of alienating these allies, Trump is also at the risk of shooting himself in the foot as many of the 14 countries hit with tariffs on Monday supply important goods. As importers would pass on the increased costs to the costumers, common people would foot the bill.

South Korea and Japan are major supplier of cars, automobile parts, semiconductors, pharmaceuticals, and machinery; Malaysia is the second-largest supplier of chips; Bangladesh, Indonesia, and Cambodia are manufacturing hubs for apparel and accessories, and South Africa accounts for nearly half of all US platinum imports and was the largest single supplier last year, according to CNN.

Trump has also violated the spirit of negotiations with his language. Even as he has extended the deadline for talks to August 1 and has said he could extend it further if talks get prolonged, he also threatened these 14 countries with additional tariffs if they would impose retaliatory tariffs.

Trump’s false arguments to spare adversaries

The Trump administration has justified the sparing of adversaries like Russia with false arguments.

In April when Trump first announced ‘reciprocal tariffs’, a White House official told The New York Times that countries like Cuba, Belarus, North Korea, and Russia were not slapped with tariffs because “they are already facing extremely high tariffs and our previously imposed sanctions preclude any meaningful trade with these countries”.

Separately, a White House official told journalist Jasmine Wright that Russia is “not on this list because sanctions from the Ukraine war have already rendered trade between the two countries as zero”.

These are false arguments as the US trade with Russia or Iran is not zero despite wars in Ukraine and West Asia.

Moreover, these wars did not prevent the administration from slapping Ukraine with 10 per cent tariff and Israel with 17 per cent. It was worse for Israel as while the country faced 17 per cent tariff, its archenemy Iran —which is formally committed to the destruction of Israel and calls the United States ‘Great Satan’— faced just 10 per cent tariff!

Moreover, it’s false to say that US has zero trade with Russia, Iran, or North Korea.

In 2024, the total US-Russia trade despite the war and sanctions was estimated at $3.5 billion with US exports amounting to $526.1 million and rest being imports from Russia. US exports to Russia included essential pharmaceutical and medical supplies, such as vaccines and medical equipment, and Russian imports compromised radioactive chemicals and fertilisers.

In 2023, US exported $59 million worth goods to Iran, such as medical equipment, vaccines, and pharmaceutical products. Iran exported around $2.2 million worth products to the United States, such as paintings and sculptures.

In 2024, the United States exported goods worth $1.5 million, such as chemical, pharmaceuticals, and edibles, to North Korea.

Trump shakes markets with latest tariffs

Markets fell quickly in response to Trump’s tariffs on Monday, according to Bloomberg.

After all-time high rallies last week, the S&P 500 fell 0.8 per cent as of 4 pm New York time on Monday and Nasdaq 100 fell 0.8 per cent.

US treasuries also dropped with longer-dated bonds underperforming.

The currencies of South Korea, South Africa, and Japan fell more than 1 per cent against the US Dollar and Japanese automakers’ American depository receipts (ADRs) fell to session lows with Toyota ADRs falling 4.3 per cent and Honda ADRs falling 3.9 per cent.