Trump hits Japan, South Korea with 25% tariffs from August 1; Dow loses nearly 500 points

Wall Street opened the week in the red on July 7, rattled by a fresh burst of trade tensions and political drama. The Dow Jones Industrial Average tumbled 525 points, or 1.2%. The S&P 500 fell 0.9%, and the Nasdaq Composite lost 1%, as investors braced for potential economic fallout.

The White House has issued letters to Korea and Japan, announcing 25% tariffs on imports from those countries starting August 1, according to posts on President Donald Trump’s Truth Social account. The letters warned that any retaliatory tariffs from Korea and Japan would be added on top of that 25% rate.

Treasury Secretary Scott Bessent told CNBC that there would be several trade announcements over the next 48 hours, adding that he expects “it’s going to be a busy couple of days.” However, Bessent did not specify which countries might be involved.

Investors had been anticipating tariff measures this week, as Trump’s initial 90-day reprieve on the reciprocal tariffs announced in April was set to expire.

Tensions flared further as Trump threatened an additional 10% tariff on nations aligning with the “Anti-American policies of BRICS,” referring to the bloc of Brazil, Russia, India, and China. Trump did not elaborate on what specific BRICS policies he was targeting. The announcement coincided with a BRICS summit underway in Rio de Janeiro, Brazil, where member countries have increasingly discussed reducing their reliance on the U.S. dollar.

Meanwhile, Tesla shares slumped 7%, dragging the broader market lower, after CEO Elon Musk revealed plans over the weekend to launch a new political party called the “America Party.” Investors have grown wary of Musk’s political ambitions, which some argue are tarnishing Tesla’s brand and sales.