Over the past few months, companies including Fujifilm, Sigma, Canon and ASUS have raised prices in the United States. These increases happened because of the tariffs imposed by President Trump. Now the President has announced a round of additional tariffs on countries, including Japan and South Korea, which could see consumers suffer again.
What are tariffs?
A tariff is a tax imposed on goods that are imported into the U.S. The importer in the U.S. has to pay the fee due for a tariff in addition to the cost of the goods. As a result, the goods become more expensive at the retail level because the importer needs to recoup the cost of the tariff. The manufacturer outside the U.S. is not directly affected. They are paid the same amount for the goods by the importer, whether there is a tariff or not. However, the increased price might reduce consumer demand for the affected products in the U.S. The tariff is paid directly to the US government.
What has President Trump said?
President Trump published letters to the leaders of 14 countries on his Truth Social account. The list of countries included Japan and South Korea. In the letters, President Trump explained that from August 1, 2025, he will charge an additional 25% tariff on goods from the two countries. In addition, President Trump warned Japan and South Korea not to impose new tariffs on U.S. goods. He said that if they did, then those amounts would be added on top of the 25%. However, the President advised that if the countries moved their manufacturing to the U.S., there would be no tariffs.
Why has President Trump imposed the tariffs?
President Trump is using the tariffs as a negotiating tool. The U.S. is currently engaged in trade negotiations with a lot of countries around the world. President Trump is unhappy that the U.S. imports more goods from some countries than it exports back to those countries. This is known as a trade deficit.
By imposing tariffs, President Trump hopes that U.S. consumers will stop buying imported goods as they get more expensive. He also hopes that this drop in demand will make the other countries give more concessions in the trade negotiations.
What we think
The negotiations between the U.S. and the 14 countries affected by the new tariffs will continue over the coming weeks. While Japan and South Korea are facing 25% tariffs, some other countries will be hit by rates as high as 40%. President Trump has reduced or delayed tariffs in the past, so the countries will be hoping he can be persuaded to do so again. If that doesn’t happen, however, consumers in the U.S. will lose out again as prices rise once more.
