International trade: discussing economic news and consequences

stock down about 7% right now.

We have the analyst behind that

call here to explain. But let's

begin in Washington with the

latest news on the tariff front.

And Meghan Costello has the

details. Meghan, we had heard

things were a little contentious

with the Japanese, which was

supposed to be one of the first

deals announced and now this.

>> Yes. Now this. Kelly, the

president did post overnight on

Truth Social that he would start

sending these letters at noon

today, telling countries what

their exports would face to send

them into the U.S. And now, just

in the last hour, we got the

first of those the president

posted on Truth Social that he

says he sent to the leaders of

Japan and South Korea. Very long

letters here, but some top line

details to get into these would

be 25% tariffs on all Japanese

and South Korean exports into

the U.S, effective on August

1st, on top of any tariffs that

are on that are already in place

or that are forthcoming in terms

of the tariffs. He also said any

retaliation would lead to a

commensurate increase in the

tariff rate, meaning if they

retaliate, he's going to lift

this tariff rate even further.

Trump also said that he would

consider an adjustment if

countries do open their markets.

And that's the key, Kelly, is

that there is no certainty here,

he goes on to say, hinting

further, hinting at further

changes, saying, quote, these

tariffs may be modified upwards

or downwards depending on our

relationship with your country.

So interesting there that while

the markets and investors have

been craving certainty, they're

not exactly getting it with this

letter. And Kelly, the way I

would sort of characterize this,

even though we are seeing market

reaction here, is just to

remember that what this is

essentially doing is kicking

back in the reciprocal rates for

these two countries that were

announced on April 2nd, South

Korea was already seeing 25%.

Japan was at 24%. The white

House has been threatening for

weeks. If they didn't strike a

deal with these countries. We'd

see those rates kick back in on

July 9th. Now, that date changes

to August 1st, but otherwise

everything else pretty much

holds the same. So despite all

the bluster in these letters, we

are seeing them follow through

on that threat just delaying

down the road a little bit

further. Kelly.

>> It was interesting to hear

the Treasury Secretary, Megan,

who also talked about

effectively how with 100

countries that are too small to

really affect the trade deficit

that much, we may not have the

capacity to even do any deals.

And I wonder what that means.

>> Yes, that's going to be

interesting. That's where I

think you'll just see these

blanket tariffs have to take

effect because they there isn't

enough there. There isn't enough

bandwidth to sort of negotiate

deals. And they have said from

the beginning that they're

focused on something like the

top 15 to 18 largest trading

partners. It would be

significant if we suddenly see

huge tariffs imposed on on very

small countries. It's headline

worthy and it doesn't bode well

for certainty and for the path

forward. But I would also say

that outside of the top 15 or 18

markets, we're not getting a ton

coming in from those countries.

But we would still see, you

know, importers having to pay

those tariffs when they do

import goods from whatever the

country might be.

>> Yeah. I mean, you add it all

up. We do seem to be tiptoeing

back to the landscape that was

initially set out for us on

April 2nd. But Megan the

market's up like 15% since then.

>> Yes. That's really

interesting I think is that so

far there's been a lot of

shrugging off of everything that

we've seen so far. And I would

say that's because things aren't

in place yet. We continue to see

these tariffs. And even though

this looks a little bit like an

escalation, that he really means

business, he has set these

letters. They're doing it in

conjunction with delaying the

deadline from July 9th to August

1st. By doing that, they say

it's not kicking the can down

the road any further. Officials

get defensive when you try to

talk to them about that, but it

does allow for more

negotiations. So it means that

even while the market is

reacting today, they probably

have one eye on that