President Trump on Tuesday suggested that his team would force Japan to accept higher tariffs of “30%, 35%, or whatever the number is that we determine.” Notably, that proposal is higher than the 24% “Liberation Day” level and the current baseline 10% tariffs in place while the two sides negotiate.
“I’m not sure we’re going to make a deal,” Trump said. “I doubt it with Japan. They’re very tough. You have to understand, they’re very spoiled.”
Trump’s tariff hike threat on Japan is a worst-case scenario for Tokyo. And if Trump follows through, experts believe Japan will have no choice but to respond.
“There is some risk of a US tantrum that results in higher punitive actions by Washington this month,” said Kurt Tong, a former senior US diplomat in Asia who’s now a managing partner at the Asia Group. “If that happens, Japan may have no choice but to hit back with its own specific countermeasures.”
With Japan as his jumping-off point, Trump renewed threats that he may stick to his self-imposed July 9 deadline for making trade deals and issue new tariff levels to trading partners, forgoing another pause to “Liberation Day” duties.
“No, I’m not thinking about the pause,” Trump said aboard Air Force One when asked if he would extend the tariff pause, per Bloomberg. “I’ll be writing letters to a lot of countries.”
The president’s comments come after a Financial Times report Tuesday suggested that Trump’s team is aiming for smaller, quick agreements before July 9, when Trump plans to bring back his toughest tariffs.
Top administration officials have been providing mixed signals on the malleability of the July 9 deadline while countries race to finalize talks. But on Monday, Treasury Secretary Scott Bessent had warned that “recalcitrant” countries would face a return of steep “Liberation Day” tariffs.
Meanwhile, the European Union has signaled it was willing to accept a 10% universal tariff on many of its exports but is seeking exemptions for pharmaceuticals, alcohol, semiconductors, and commercial aircraft as part of a trade deal, Bloomberg reported.
On the North American front, Canada has scrapped its digital services tax that was set to affect large US technology companies. The White House said trade talks between the two countries had resumed after Trump threatened to cut off trade talks.
Here are the latest updates as the policy reverberates around the world.
LIVE1305 updates
Trump’s 35% tariff threat feeds Japan’s worst-case scenario fear
For several months, the back and forth between the US and Japan has been an ongoing concern as the two parties attempt to reach a trade deal and avoid skyrocketing tariffs.
Now Trump has threatened Japan with tariffs of up to 35%. This is a worst-case scenario for Japan and has started to raise doubts over Tokyo’s tactics in trade talks.
“Japan should be forced to pay 30% or 35% or whatever number we determine, because we have a very big trade deficit with Japan,” Trump said on Tuesday, calling the country “spoiled.”
Experts have warned about taking Trump’s comments at face value and believe that a deal will get done. However, they have also said that now is perhaps the time for Japan’s Prime Minister Shigeru Ishiba to take a less friendly stance when it comes to trade negotiations.
“There is some risk of a US tantrum that results in higher punitive actions by Washington this month,” said Kurt Tong, a former senior US diplomat in Asia who’s now a managing partner at the Asia Group. “If that happens, Japan may have no choice but to hit back with its own specific countermeasures.”
Big, left-hand drive US cars a tough sell in Japan: Ishiba
Japan’s Prime Minister Shigeru Ishiba has blasted American cars, saying they are a tough sell in Japan. Ishiba added that his government needs to discuss with the US how to boost car imports from America.
Why your fourth of July fireworks may be disrupted — next year
As the US gets ready to celebrate its Independence Day on July 4, the day it was liberated and rebelled against British rule, there is still one area that it may still be dependent on and thats China.
They tried Made in the USA. It was too expensive for their customers.
For many companies, the process from manufacture to sales has always started in China. When Plufl co-founders, Yuki Kinsohita and Noah Sliverman, began making dog beds for humans and pitched their prototype to Shark Tank in 2022, they envisioned making their plush, memory foam beds in China and selling them at retail in the US for $299.
Mark Cuban and Lori Greiner both invested $200,000 for a 20% share in the business, which went on to make over $1 million in sales in 2023, via Amazon and on their company website.
However, this dream changed overnight when President Trump slapped a 145% tariff on items imported from China in April. The business leaders sprang into action and started to look at retailers and whether they would be interested in selling a US-made version of the human dog beds.
Italy could lose $23.6B in exports, 118,000 jobs with US tariffs: Industry head
The risk that tariffs pose to the global economy have never been more real and now for Italy the macroeconomic pressures that President Trump’s tariffs bring are very concerning, with the head of the main Italian lobby saying on Wednesday that Italy risks losing around $23.6 billion in exports and 118,000 jobs if the US imposes tariffs of 10%.
Trump tariff risks put Asian stocks’ strong July record to test
If investors are expecting a seasonal lift for Asian equities this summer, they may have to think again. Tariff pressures and macroeconomic concerns have started to dampen sentiment.
Trump threatens Japan with higher tariff than ‘Liberation Day’ number
President Trump on Tuesday, amid days of renewed whiplash on the tariff front, suggested he wouldn’t extend a July 9 deadline for higher tariffs to resume on trade partners. He also threatened a tariff level on goods from Japan that would be higher than those he levied on the country in April.
US manufacturing mired in weakness as tariffs bite
US manufacturing remained weak in June. New orders were low and input costs went up slightly. This shows Trump’s tariffs on imports are still making it hard for businesses to plan.
EU toughens stance on Donald Trump’s tariffs as deadline looms
The European Union has hardened its stance in trade trade talks with US President Donald Trump and are insisting the US drops its tariffs on the EU immediately as part of any framework deal ahead of the July 9 deadline.
Trade commissioner Maroš Šefčovič has been told he must take a tougher line on his trip to Washington this week as Brussels attempts to remove or at least cut Trump’s levies in the long term.
Powell: Fed likely would have cut rates if not for tariffs
Federal Reserve Chair Jerome Powell said that tariffs are causing the central bank to take its time before cutting interest rates.
Powell is speaking today about the Fed’s policy stance at an ECB forum in Sintra, Portugal. When asked if the Fed would have cut interest rates by more by now if it weren’t for higher tariffs, Powell stated, “I think that’s right.”
“In effect, we went on hold when we saw the size of the tariffs,” Powell continued. “Essentially, all inflation forecasts for the United States went up materially as a consequence of the tariffs.”
Powell noted that the US economy remains healthy overall but that he expects to see the effects of tariffs if they filter through the economic data in the coming months. In recent days, Powell has faced increased pressure from President Trump to lower interest rates, including in the form of handwritten notes.
“Ignore the tariffs for a second,” Powell said of the economy. “Inflation is behaving pretty much exactly as we have expected and hoped that it would. We haven’t seen effects much yet from tariffs, and we didn’t expect to by now.”
Watch Powell speak live below:
CEO spends 1.83M Amex points to pay surprise tariff bill
Perhaps the moral of this story really is — as Amex likes to say — “Don’t leave home without it.” Nowhere was this more true than for CEO Robert Keeley, who when faced with an $11,000 tariff bill decided to cash in 1.83 million American Express reward points to pay it.
6 questions facing US stock investors as 2025’s second half kicks off
From President Trump’s tariffs to the Federal Reserve rate cut saga, the US stock market has just completed a roller-coaster first half of the year. The S&P 500 (^GSPC) is up 5% year to date, rebounding from its April slump after Trump’s “Liberation Day” tariffs were announced. But what should investors watch for in the second half of 2025? Here’s a look at six key questions facing US stock investors at the start of the second half.
India seeks to seal interim trade deal with US this week
It seems that President Trump will bag a second trade deal soon. India is currently on track to seal an interim trade agreement with the US as soon as next week, according to a report in the FT on Tuesday.
The FT, who received exclusive information from people briefed on the talks, reported that an interim deal between the US and India would be a step closer to a comprehensive bilateral accord between Washington and New Delhi. It would also be the first with a major US trading partner.
US narrows trade focus to secure deals before Donald Trump’s tariff deadline
President Trump’s team has decided to focus on smaller trade deals instead of big, wide-ranging agreements, according to a report in the FT, who cited people familiar with the matter.
The Trump administration is hoping these quick deals will stop the US from bringing back tough tariffs. Officials want to reach phased deals with countries that are most ready to talk before July 9. That is when Trump plans to reimpose harsh tariffs if no agreements are made.
These smaller deals mean countries could avoid the worst tariffs for now. But they would still face some existing tariffs while talks on harder issues continue.
EU prepared to accept Trump’s universal tariff but seeks key exemptions
The European Union, looking to clinch a trade deal with the US before a July 9 deadline, is prepared to accept a “universal” tariff of 10% on goods exported to the US, according to a Bloomberg report Monday.
But the bloc is seeking exemptions on key sectors, including pharmaceuticals, alcohol, semiconductors and commercial aircraft.
Trump says he will be sending Japan a letter, threatening new tariff levels
President Trump said on Monday afternoon he was willing to impose a higher tariff rate on Japan, saying the country refused to accept US rice exports.
“To show people how spoiled Countries have become with respect to the United States of America, and I have great respect for Japan, they won’t take our RICE, and yet they have a massive rice shortage,” Trump posted on Truth Social. “In other words, we’ll just be sending them a letter, and we love having them as a Trading Partner for many years to come.”
Trump’s statement that he would send a letter to Japan outlining the new tariff rate comes a little more than a week before a July 9 deadline and after months of being locked in trade talks with Japanese leaders. Trump has threatened to send letters to trading partners should negotiations break down.
During trade talks, Japan has sought an exemption from the Trump administration’s 25% auto duties. Broad tariffs on Japanese goods were set to jump back up to 24% on July 9 if no deal is reached and the tariff pause is not extended.
Hassett: Canada trade talks to restart ‘immediately’ after country scraps tax
Bessent warns countries on July 9 deadline
Treasury Secretary Scott Bessent warned “recalcitrant” countries that their tariff levels could soon snap back to “Liberation Day” levels, the latest sign of ambiguity in President Trump’s firmness around a July 9 deadline.
Via Reuters:
Administration officials — and Trump himself — have sent mixed signals on whether he may look to extend that deadline. Trump on Sunday suggested he didn’t think he’d “need to” extend it.
