The Price of Madness - How Trump's New Tariffs on Japan and South Korea Are Shifting the Global Economy More and More

It was a letter like a ransom note - with the letterhead of the White House, but the tone of a trade warrior on a personal vendetta. On July 7, 2025, Donald Trump, President of the United States, sent a two-page letter to Japanese Prime Minister Ishiba Shigeru. The tone: jovial and threatening at the same time. The content: the announcement of a blanket punitive tariff of 25 percent on all Japanese products exported to the United States - starting August 1. “A great moment for our trading relationship,” Trump calls it. In reality, it is an economic earthquake.

Not only Japan, but also South Korea is affected. The same letter was sent there, accompanied by a barely veiled threat: those who manufacture within the borders of the United States will be spared. Those who continue to rely on exports will be made to pay - unless they open their “heretofore closed markets” to American goods. Then, maybe, there would be “adjustments” to the letter. What Trump is staging here is not merely economic policy. It is an economic assault with a diplomatic façade. The letter drips with pathos and propaganda. Trump praises the United States as the “number one market in the world,” invokes “years of patience” in dealing with Japan - and yet does nothing other than unilaterally dictate what is to be understood as “fair trade.” Fair, in Trump’s logic, means advantages for America, disadvantages for the rest of the world. According to the letter, the tariffs are intended to correct the “decades-long deficits” in trade with Japan - allegedly caused by “non-reciprocal tariffs” and “non-tariff barriers.” But in reality, it is primarily American consumers who will bear this burden. And with them: global supply chains, Asian production hubs, European markets - and ultimately inflation.

Trump writes: “These tariffs may be modified - upward or downward - depending on our relationship with your country.” It is a sentence that sounds less like a trade partnership than a mafia-style pact. A sentence that makes it unmistakably clear: those who bow to Trump will be rewarded. Those who do not will be punished. The effects of his tariffs are already well known. During his first term, Trump imposed dozens of punitive measures against China, the EU, and other countries. The result: trade wars, supply shortages, price hikes. But now it is no longer about isolated conflicts - it is about a systematic retreat of the United States from the global trading order, and an attempt to force other countries into a new state of dependency through threatening letters. The tragedy: the affected countries are hit hard - but they are not the only ones who pay. When goods become more expensive, prices rise worldwide. When supply chains falter, the entire market suffers. When exporting countries are forced to shift, power structures are realigned. And when the world’s largest economy believes it can gain advantages through intimidation, not only trade is thrown off balance, but also the principle of a rules-based international order. Trump announced the tariffs on Truth Social - with a casualness as if the economy were a playground. But the real message of his letter is brutally clear: America makes the rules - or no one does. And as long as Donald Trump is in power, no ally is safe, no agreement is lasting, no promise is stable. The world pays the price - for a policy that benefits only one man: the one who signed it.