U.S. President Donald Trump has sent letters to the leaders of 14 countries, including Bangladesh, announcing the imposition of higher tariffs effective from August 1, 2025. This marks a new phase in the trade war he initiated earlier this year.

The 14 countries include Bangladesh, Japan, South Korea, Serbia, Thailand, Tunisia, Malaysia, Kazakhstan, South Africa, Bosnia and Herzegovina, Indonesia, Cambodia, Laos, and Myanmar.

Tariff rates vary by country: Tunisia, Malaysia, and Kazakhstan face 25%; South Africa and Bosnia and Herzegovina face 30%; Indonesia faces 32%; Bangladesh and Serbia face 35%; and Cambodia, Thailand, Laos, and Myanmar face duties ranging from 36% to 40%.

The announcement of a 25% tariff on key allies like Japan and South Korea has rattled Wall Street, with the S&P 500 index (.SPX) dropping significantly. Asian markets, however, were less affected by the news.

Letters to 14 Countries, Warning Against Retaliation
Trump has sent letters to 14 countries, including smaller exporters like Serbia, Thailand, and Tunisia. While the letters hint at room for negotiation, they also warn against retaliatory tariffs. In letters posted on his Truth Social platform, Trump addressed Japan and South Korea, stating, “If you decide to raise your tariffs, the amount by which you increase them will be added to the 25% we charge.”

These tariffs, effective from August 1, will not stack with previously announced sector-specific duties, such as those on automobiles, steel, and aluminum. For example, the 25% tariff on Japanese cars will remain separate and not combine with the new 25% country-specific tariff to become 50%.

Extended Deadline Amid Uncertainty
Since Trump declared a global trade war in April, financial markets have experienced volatility. On Monday, he signed an executive order extending the negotiation deadline from Wednesday to August 1. He stated, “I’d say the deadline is firm, but not 100%. If they want to do something different, we’re ready to listen.”

The tariff rate for South Korea aligns with previously announced rates, while Japan’s rate is 1% higher than the rate declared on April 2. In April, Trump had capped all reciprocal tariffs at 10%, effective until Wednesday. So far, only the United Kingdom and Vietnam have secured trade agreements, and in June, Washington and Beijing agreed on a tariff framework.

Reactions from Allied Nations
Wendy Cutler, Vice President of the Asia Society Policy Institute, remarked, “Trump’s tariff hikes are unfortunate, but there’s still time for negotiations. The game isn’t over yet.”

Japanese Prime Minister Shigeru Ishiba said on Tuesday that progress has been made to avoid a previously proposed 35% tariff. He noted, “The U.S. has proposed accelerating negotiations by the new August 1 deadline, and the letter’s contents could be revised based on Japan’s response.”

South Korea stated it will intensify trade talks with the U.S. and views Trump’s latest plan as an extension of the reciprocal tariff deadline. The country’s industry ministry said, “We will accelerate discussions for mutually beneficial outcomes in the remaining time.”

South African President Cyril Ramaphosa called the 30% tariff unjustified, noting that 77% of U.S. goods enter South Africa duty-free. His spokesperson confirmed ongoing discussions with the U.S.

Market Impact
Trump’s tariff announcement has caused turbulence in U.S. stock markets, with the S&P 500 index falling by nearly 0.8%. Shares of Japanese automakers Toyota Motor dropped 4%, and Honda Motor fell 3.9%. The U.S. dollar strengthened against the Japanese yen and South Korean won.

Brian Jacobsen, chief economist at Annex Wealth Management, said, “Trade talks have sapped market momentum. However, most tariff rates have been reduced, and the letters seem like ‘take it or leave it’ offers.”

European Union’s Position
EU sources confirmed that the European Union has not received a tariff letter. “Good discussions” have taken place between European Commission President Ursula von der Leyen and Trump, and the EU is working toward a trade agreement by Wednesday.

Warning to BRICS Nations
Trump issued a warning to BRICS group leaders meeting in Brazil, stating that an additional 10% tariff would be imposed on any BRICS countries adopting “anti-American” policies. The BRICS group includes Brazil, Russia, India, China, and others.