ASIA ECONOMY
Trump tariffs raise the specter of sharper economic downturn for South Korea and Japan

PUBLISHED TUE, JUL 8 2025 10:21 PM EDT
Lim Hui Jie
@IN/HUI-JIE-LIM-A7371176/

KEY POINTS
• While South Korean imports to the U.S. face 25% tariffs, the same as Trump promised in April, the rate on Japan has been raised by 1 percentage point to 25%.
• Both Japan and South Korea saw first-quarter gross domestic product contract on a quarter-on-quarter basis.
• Imports of automobiles and auto parts to the U.S. currently incur a 25% tariff, while steel and aluminum attract a 50% levy on most countries.


WASHINGTON, DC - JULY 7: An aide picks up a page from a letter to Japan and South Korea, signed by U.S. President Donald Trump, announcing 25% tariffs beginning on August 1st, during the daily press briefing in the Brady Press Briefing Room at the White House on July 7, 2025 in Washington, DC.
Andrew Harnik | Getty Images News | Getty Images

In the first batch of "tariff letters" sent to trading partners, U.S. President Donald Trump took aim at two of the closest U.S. allies in Asia: Japan and South Korea — both are already bearing the brunt of the existing duties on auto and steel exports.

Additional tariffs would further hurt these two exports-dependent economies that are grappling with a slowdown in growth, with Japan likely staring at a technical recession, or two straight quarters of economic contraction.

Both Japan and South Korea saw first-quarter gross domestic product contract on a quarter-on-quarter basis.

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