A sell-off on Wall Street intensified following President Trump’s recent comments posted on his Truth Social profile.
President Trump announced the implementation of a sweeping 25% tariff on all Japanese imports, effective August 1, 2025. The White House justified the decision by citing the long-standing trade imbalance between the U.S. and Japan and warned that goods routed through third countries would also be subject to the new tariff. Japanese firms manufacturing within the U.S. will be exempt from the new duties, though potential retaliatory tariffs from Japan could result in even steeper levies on Japanese products. Reports also suggest a similar letter was sent to South Korea, indicating the possibility of further tariff escalations.
Trump’s actions may be part of a negotiation strategy, given the approaching end of trade talks. However, this marks yet another trade escalation that the market had hoped to avoid. Following the announcement, U.S. Treasury yields rose across all maturities, USDJPY surged to session highs around 146.10, gaining 1.10%, and EURUSD fell below key technical support levels.
Major U.S. stock indices also posted declines.
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