Trump's New Tariff Threats: EU Awaits Decision

The tariff war is back in full swing. On Monday evening, Donald Trump announced that the US would significantly increase tariffs on several countries, up to 40%.

The EU has not yet received its decision but is next in line.

The deadline for tariff negotiations with the US was initially set for July 9 but has now been postponed to August 1.

On Monday, US President Donald Trump published on Truth Social the letters he sent to several countries' governments and leaders about new tariff increases.

Japan and South Korea were the first to be targeted. The countries face 25% tariffs on all goods starting August 1—unless new trade agreements are reached before then. If the countries respond with increased tariffs against the US, American tariffs will rise further.

"The figure you choose to increase will be added to the 25%," Trump writes.

In his letters, Trump states that the countries will be subjected to 25% tariffs in exchange for access to the US, which he calls "the world's foremost market."

Later on Monday, Trump released additional letters, announcing 40% tariffs for Laos and Myanmar. South Africa will face 30% tariffs, while Malaysia and Kazakhstan will see tariffs of 25%.

No New Tariffs on the EU—Yet

The EU is one of the trading partners that has not yet received any new tariff decisions.

The Union's goal is still to negotiate a new trade agreement with the US, by mid-week at the latest.

"We are working towards July 9 as the point where we at least want a principle agreement with the US," said Olof Gill, the EU Commission's trade spokesperson, according to Politico on Monday.

In a press release, Foreign Trade Minister Benjamin Dousa commented on the announcement.

"This was an expected announcement and does not mean any drama for Sweden. Hopefully, we can have an EU-US agreement in place before August 1. The global economy will fare significantly better with more agreements in place and some stability, instead of hour-by-hour announcements via Twitter."

Markets Fall After New Tariffs

After Trump's tariff announcements were published, the US stock markets were shaken.

The S&P 500, Dow Jones, and Nasdaq all traded down over one percent following the announcements. Japanese car companies were among those affected, with both Toyota and Honda falling about four percent on the US stock market.