Washington is preparing to impose a 25 % tariff on imports from Japan and South Korea starting 1 August, after the previous exemption period expires. Japanese goods shipped to the U.S. market totaled roughly $155 billion in 2024, while imports from South Korea exceeded $110 billion. Should the duties take effect, they could add an estimated $66 billion in costs for U.S. importers. Tokyo called the move “regrettable,” and Seoul convened an emergency meeting to discuss its response.
Markets reacted swiftly: the Japanese yen climbed about 0.6 % against the dollar as investors sought safe-haven assets. Spot gold jumped immediately and steadied near $3,340 per ounce, while Japan’s Nikkei index fell 1.3 % and South Korea’s KOSPI dropped roughly 1 % under pressure from exporter shares. The trade tensions also prompted some companies to consider shifting supply chains to countries not covered by the levies. U.S. Treasury yields edged higher, trimming some of gold’s gains.
Economists warn the proposed tariffs could shave roughly 0.3 % off GDP growth for both Japan and South Korea, while global trade expansion may slow by 0.6 percentage point this year. In the United States, retail groups project consumer prices for electronics and automobiles could rise between 5 % and 8 % if the full cost is passed through. Traders now look to tomorrow’s Federal Reserve minutes to see whether policymakers factor the tariff risk into their rate outlook. Market direction will hinge on whether the rhetoric turns into concrete action—or if tensions ease.
