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Trump tariffs portend more economic troubles for South Korea and Japan
WASHINGTON, DC – JULY 7: An aide picks up a page from a letter to Japan and South Korea, signed by U.S. President Donald Trump, announcing 25% tariffs beginning on August 1st, during the daily press briefing in the Brady Press Briefing Room at the White House on July 7, 2025 in Washington, DC.
Andrew Harnik | Getty Images News | Getty Images
In the first batch of “tariff letters” sent to trading partners, U.S. President Donald Trump took aim at two of the closest U.S. allies in Asia: Japan and South Korea — both are already bearing the brunt of the existing duties on auto and steel exports.
Additional tariffs would further hurt these two exports-dependent economies that are grappling with a slowdown in growth, with Japan likely staring at a technical recession, or two straight quarters of economic contraction.
Both Japan and South Korea saw first-quarter gross domestic product contract on a quarter-on-quarter basis.
While South Korean imports to the U.S. face 25% tariffs, the same as Trump promised in April, the rate on Japan has been raised by 1 percentage point to 25%.
Exports — including services — made up almost 22% of Japan’s GDP in 2023, according to the latest data from the World Bank, and 44% of South Korea’s GDP in 2023.
Currently, imports of automobiles and auto parts to the U.S. incur a 25% tariff, while steel and aluminum attract a 50% levy on most countries.
Automobiles are Japan’s largest exports to the U.S. and are also among South Korea’s top exports. South Korea was also the fourth-largest exporter of steel to the U.S. in 2024, according to the International Trade Administration under the U.S. Commerce Department.
Japan’s Prime Minister Shigeru Ishiba reportedly said the country “actively seeks the chance of an agreement that benefits both countries, while protecting Japan’s national interest.” In May, Ishiba said that his country will not accept a deal that does not see the removal of auto tariffs.
The newly announced tariffs will lower Japan’s GDP by 0.1 percentage point by end-2026, according to Norihiro Yamaguchi, Lead Japan Economist at Oxford Economics.
“Given that the economy is already suffering from high tariffs on auto and elevated global trade policy uncertainly, and also weak consumption, the impact shouldn’t be dismissed,” he told CNBC
Yamaguchi said that Japan’s economy will “barely grow” in the second half of 2025 and in the first half of 2026, if not falling into a recession.
The U.S. is Japan’s largest export market, with 21.3 trillion yen ($145.76 billion) of shipments to the country in 2024, while South Korea exported goods worth $127.8 billion to the U.S. in the same year, and counts the U.S. as its second-largest export market.
Reflecting a “more intensified tariff policy stance,” the Bank of Korea in May nearly halved GDP growth estimates for 2025 to 0.8% from February’s projection of 1.5%.
“The recovery in domestic demand has been delayed, while export growth is expected to slow further due to the impact of U.S. tariffs,” the BOK said.
Frederic Neumann, Chief Asia Economist at HSBC told CNBC that should Japan and South Korea fail to reach a deal, these tariffs will pose “considerable headwinds to growth.”
Both Japan and South Korea are already facing sluggish domestic demand.
Offering a silver lining, Trump said that he was willing to “perhaps, consider an adjustment to this letter” if the countries were to open their “heretofore closed” markets to the U.S.
Pressure tactics are being brought to bear on South Korea and Japan, said Vishnu Varathan, managing director at Mizuho Securities.
“The frustration with Japan’s more principled and holistic approach (covering sectoral tariffs) stalling a deal being a source of frustration for U.S. trade negotiators, and crucially for Trump, speaks for itself.” he added.
While Trump has not publicly expressed anger toward South Korea, Varathan said “it is not unimaginable that there are sticking points similar to Japan’s, thereby invoking the letter.”
Markets, meanwhile, appear to be shrugging of the tariff threats — for now. HSBC’s Neumann said that Trump’s letters essentially amounts to a deadline extension for tariff negotiations by three weeks.
“Financial markets are taking the latest news in their stride, focusing on the possibility that the threatened tariffs may still be whittled down through negotiation,” he said.
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Striking Philadelphia union workers reach deal with city
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“The work stoppage involving District Council 33 and the City of Philadelphia is OVER,” Mayor Cherelle Parker announced on social media early Wednesday morning.
A marathon negotiation session Tuesday between the city and its blue collar workers’ union responsible for trash pick-up and other duties around the city has resulted in a tentative contract agreement.
DC33 President Greg Boulware was exhausted after the 12-hour negotiation session and said they did what they had to do.
“There’s a lot of factors involved in what was going on and we ultimately did what we thought was in the best interest of all of our membership,” Boulware said.
The deal appears to be a complete win for the city because it got just about everything Parker wanted with a 3% raise in each of the three years of the deal. It’s a deal the Parker administration is calling “historic.”
When adding in the 5% increase the city agreed to last year to extend DC33’s contract by one year, the increase for the union over Parker’s four-year term will total 14%. That’s still well below the 32% total pay increase the union was fighting for.
“Your union stood up and fought for you and we did the best we can with the circumstances we had in front of us,” Boulware said.
Those circumstances include workers expecting to miss a paycheck Thursday.
Union officials have told workers to return to the job pending a ratification vote.
Nine thousand members of American Federation of State, County and Municipal Employees District Council 33 went on strike July 1. The strike has resulted in massive piles of trash piling up on city streets and around trash drop-off sites designated by the city.
The strike also resulted in changes to the city’s annual Fourth of July concert with headliner LL Cool J and city native Jazmine Sullivan both dropping out.
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Texas’s Camp Mystic was ‘a place of joy’. Floods turned it into a site of great loss | Texas floods 2025
The loss of 27 campers and counsellors from Camp Mystic to the Texas Hill Country flood may serve, at a terrible cost, to expand its considerable reputation across Texas and beyond. Even as the floods claimed more lives along the valley – more than 100 confirmed dead and 160 people unaccounted for as of Tuesday – the loss of several “Mystic Girls” has dominated the headlines.
The camp, which offers two four-week terms and one two-week term over the summer, has been the go-to summer camp for daughters of Texans for nearly a century. It’s so popular that fathers have been known to call the registrar to get their daughters on the list from the delivery room.
The camp, which spans more than 700 acres, has been widely described as an all-girls Christian camp, lending an image of baptisms in the river, but the religious component may be overstated: the camp is known as one of dozens along the Guadalupe River that Texan families send their young to escape the brutal heat of the lowlands.
Now at least one-half of Camp Mystic, which was due to celebrate its centenary next year, lies in ruins, torn apart by raging floodwaters. The sound of song and girls playing has been replaced by the sound of chainsaws and heavy equipment as 19 state agencies and thousands of volunteers work to search and clear mounds of flood debris along the river, including the muddied personal items of the campers.
Five days after the flood, the task along the valley has become a search-and-recovery operation: no one has been rescued from the river alive since Friday. In addition to the lost girls, Camp Mystic’s director, Richard “Dick” Eastland, a fourth-generation owner of the camp, died while attempting to bring five girls to safety.
“It tugs at the heart of anyone in the world that see the pictures of those little faces,” said Claudia Sullivan, author of a book on the Camp Mystic experience, Heartfelt: A Memoir of Camp Mystic Inspirations. “To know that they were there, having the time of their life, that they were innocent, and then to be taken away in such a tragic event – it takes you to your knees.”
Most alumni contacted by the Guardian indicated they were too upset to discuss the camp, or its reputation, as Texas Monthly put it in a 2011 article, for serving “as a near-flawless training ground for archetypal Texas women”.
It has served generations of Texas women, often from well-to-do or politically connected Texas families, including the former first lady Laura Bush, who was a counsellor, and the daughters and granddaughters of Lyndon Johnson, former secretary of state James Baker, and Texas governors Price Daniel, Dan Moody and John Connally.
The camp may have been incorrectly characterized as a “Christian” camp. “That evokes the idea of church camp but that’s not the case,” said Sullivan. “It’s a private camp for girls that holds Christian values. When I was there we spent a lot of time talking about being kind to one another and having compassion, and there were people from other denominations and faiths.”
Camp Mystic is better understood, Sullivan added, as being in a place free from pressure.
“You’re in nature, in a beautiful setting, and really removed from the world”, said Sullivan. “It’s a place of joy and innocence – or was. My sense is that it will definitely be rebuilt, but it’s awfully early.”
The outpouring of grief and rush to support the community have been striking. A church memorial service was held on Monday in San Antonio for the “Mystic girls” who had been lost. Many dressed in the camp’s green and white, together in song and prayer.
It was not possible to get to the camp on Tuesday, a tailback of 2.5 hours extended across the 7 miles from Hunt, the nearest hamlet, to Camp Mystic. At the season’s peak in July and August, the camp hosted 750 girls aged between seven and 17 years old – that’s more than half of Hunt’s population of around 1,300.
At Ingram, a riverbank town that also lost dozens from RV camps and homes to the flood, emergency workers and volunteers were pitching in, in many cases in the hope of recovering people still lost, and many bodies likely hidden under large piles of river debris, shattered homes and mangled possessions.
John Sheffield, owner of Ingram’s Ole Ingram Grocery, said the flood had not recognized social differences and nor would the recovery effort: “This is Americans taking care of Americans. There’s been such a tremendous outpouring of support and compassion.”
Down by the river, search crews were continuing to comb through debris and mud. Claud Johnson, the mayor of Ingram, was operating a digger up by Hunt. An EMS van pulled up, suggesting another body had been found. Helicopters continued to move overhead despite an incident on Monday when one was struck by a privately operated drone and was forced to make an emergency landing.
Three baristas from the Aftersome Coffee stand in San Antonio had come up to serve recovery workers. Allyson Bebleu said she had gone to church camp and it had given her some of her fondest memories.
“It’s not just for the wealthiest families, people of all types go to camp,” she said. “Everyone is putting themselves in the shoes of the Camp Mystic girls. It’s tragic.”
Camp Mystic was also the subject of a controversial video recently posed by Sade Perkins, a former member of Houston’s Food Insecurity Board. Perkins was “permanently removed” by John Whitmire, the Houston mayor, after she called Camp Mystic a “whites only” conservative Christian camp without even “a token Asian, they don’t have a token Black person”.
Richard Vela, whose 13-year-old daughter Maya was evacuated from a nearby camp, Camp Honey Creek, on Friday and was still too upset to discuss it, said Perkins’ comments “were not right. You don’t talk about people like that. There’s a lot of death going on and they still haven’t found everybody.”
Bruce Jerome, who was manning an outreach for flood survivors in Ingram, said he had known Jane Ragsdale, the director and longtime co-owner of Heart O’ the Hills Camp, in Hunt, Texas, who had died in the flooding.
“She was just genuinely wonderful,” Jerome said.
Further down the track to the river was Josey Garcia, a Democratic representative for San Antonio in the Texas state house. She and her team were also picking through the debris, pointing out vast piles that still need to be be sifted through.
Garcia, a military veteran, said it was important to come “and collaborate with our neighbors here to recover those that are missing and help Kerr county clean up. We’ve had folks coming from Laredo and outstate Kansas to lend assistance. It’s showing the spirit of Texas – when it comes to lives being devastated its our duty to step.”
Garcia, too, rejected negative characterizations of Camp Mystic.
“I’ve been hearing a lot of the rhetoric that’s been going around. This is not the time for those types of distinctions. I don’t care who was at the camp. All I know is that there are parents and families that are missing their loved ones. Whether it’s rich Caucasian children or any other children, we’d still be there.”
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Live updates on Galaxy Z Fold 7, Z Flip 7 and Watch 8
Welcome to Brooklyn, NY where Samsung is unveiling new foldable phones at its latest Galaxy Unpacked event. According to a massive leak yesterday, we’ll likely see the Galaxy Z Fold 7, Z Flip 7 and Z Flip 7 FE. That’s in line with the expectations of Samsung’s usual summer foldable releases that have happened for the past few years.
Adding weight to that report is the fact that Samsung even teased “the next chapter of Ultra” in early June, showing the silhouette of a foldable spinning around in an animation. You can read our whole article on what we expect to see at Unpacked today for the details, in case you can’t wait a few more hours.
Otherwise, buckle in to watch the livestream below and follow live commentary from our own Sam Rutherford on the scene.
Live36 updates
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A flashy video showed off the Z Fold 7’s new very thin profile, which looks a lot the Galaxy S25 Edge, ending on the Z Fold 7 taking the place of New York’s famous Flatiron building.
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