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Trump tariffs portend more economic troubles for South Korea and Japan

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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.

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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.

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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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Apple’s AirPods Pro 2 are cheaper than ever thanks to this Prime Day deal

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It’s Amazon Prime Day again, except this time it’s a four-day affair, the longest Prime Day ever. There are an overwhelming number of deals and discounts to sift through, but this steep sale on Apple AirPods Pro 2 is one of the best out there. For Prime Day, these wireless, noise-canceling headphones are selling for $149. That’s a new record-low price, and at a regular price of $249, you’re looking at 40 percent off.

The Apple AirPods Pro 2 were our overall pick for best wireless earbuds for iPhone, as well as our pick for best overall AirPods. In our hands-on review, we were impressed with the Active Noise Cancelling, as well as the transparency mode for when you’re trying to hear the outside world. We found that the audio quality on the 2nd generation of AirPods Pro was an improvement over the first, thanks to a new amplifier, driver and transducer. We also liked that you could seamlessly switch between Apple devices while using them.

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We do wish the battery life was a bit better, as they offer just six hours of listening per charge with an additional 30 hours provided by the case. In looking at the design of these AirPods, we wouldn’t be mad at a bit of an update. I guess if it isn’t broke, don’t fix it? After all, the design of an AirPod is almost instantly recognizable, so perhaps Apple wants to keep it that way.

Far and away our biggest gripe is the price of the Apple AirPods Pro. $249 is a hefty price to pay for a set of earbuds, so we’re grateful that sales like Amazon Prime Day provide a great opportunity to snag a pair for far less. If you’re looking to spend even less, both models of the AirPods 4 are also on sale for Prime Day. You can get the standard version for $89 or the model with active noise cancellation for $119.

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Ukraine suffers heaviest attack as Trump criticises Putin

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President Volodymyr Zelensky says Ukraine has been hit by the biggest ever aerial attack from Russia – 728 drones and 13 cruise or ballistic missiles hit cities around the country in multiple waves.

Zelensky condemned the “telling attack”, adding: “It comes precisely at a time when so many efforts have been made to achieve peace, to establish a ceasefire, and yet only Russia continues to rebuff them all.”

The overnight strike came after President Donald Trump said the US would send more weapons to Kyiv – a reversal of last week’s suspension which US media said Trump had not known about.

On Tuesday, the US leader expressed growing frustration at Russian President Vladimir Putin.

“We get a lot of bullshit thrown at us by Putin, if you want to know the truth,” Trump told reporters. “He’s very nice to us all the time, but it turns out to be meaningless.”

Kremlin spokesman Dmitry Peskov said Moscow was “pretty calm about this. Trump’s way of talking is generally quite harsh, the phrases he uses.”

The two leaders have been in regular contact but this has so far failed to translate into tangible steps towards a ceasefire in Ukraine – something Trump once said he would be able to achieve in a day.

Last week, following a phone call with the Russian president, Trump said he was “very unhappy”.

“He wants to go all the way, just keep killing people, it’s no good,” Trump said of Putin.

The criticism came even as the Trump administration announced a suspension of military aid to Ukraine, reportedly authorised by US Defence Secretary Pete Hegseth and Elbridge Colby, the under-secretary of defence for policy.

Asked by reporters on Tuesday who had taken the decision, Trump – sitting right next to Hegseth – replied: “I don’t know. Why don’t you tell me?”

The reversal of the decision may now mean that 10 Patriot missiles may be sent to Ukraine, according to US outlet Axios.

Kyiv relies on the interceptors to try to counter Russia’s missile and drone attacks, which continue to grow in intensity and frequency.

On Tuesday Trump also said he was “looking at” a sanctions bill by Republican Senator Lindsey Graham that would see 500% tariffs imposed on countries that trade with Russia.

Trump has been threatening sanctions on Russia since taking office in January but has so far failed to impose any. In June, he stated that he pointed out sanctions “cost a lot of money” and signalled he was waiting to see whether a deal between Russia and Ukraine would be signed instead.

However, last week the US president said he and Putin had discussed sanctions “a lot” and added: “He understands it may be coming.”

Although the east of the country and Kyiv come under fire on a regular basis, no corner of Ukraine has been spared by Russian strikes.

The city of Lutsk – which lies 90km (56 miles) from the Polish border and is a transit hub for military and humanitarian aid – suffered the brunt of Tuesday’s overnight attack.

Explosions were also reported in the western cities of Lviv and Rivne.

For their part, Russian authorities have said that a Ukrainian drone attack on the border region of Kursk killed three people and injured seven others on Tuesday.

Two rounds of ceasefire talks between Russia and Ukraine took place earlier this year but no other meetings have so far been scheduled – and neither Moscow nor Kyiv appear optimistic that diplomacy will solve the conflict, which was sparked by Russia’s full-scale invasion of Ukraine in February 2022.

Meanwhile, Russia’s summer offensive in eastern Ukraine grinds on.

“We are moving forward,” said Peskov on Wednesday. “Each new day the Ukrainians have to accept the new realities.”



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Christian Horner: Red Bull team principal fired after 20 years with team

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CNN
 — 

Red Bull team principal Christian Horner has been fired after 20 years with the team, a team spokesperson told CNN Sports on Wednesday.

Red Bull did not give a reason for Horner’s firing, but thanked him in a statement, adding that the 51-year-old will “forever remain an important part of our team history.”

“We would like to thank Christian Horner for his exceptional work over the last 20 years,” Oliver Mintzlaff, Red Bull’s chief executive for corporate projects and investments, said.

“With his tireless commitment, experience, expertise and innovative thinking, he has been instrumental in establishing Red Bull Racing as one of the most successful and attractive teams in Formula 1. Thank you for everything, Christian.”

Laurent Mekies – who works for Red Bull’s sister team Racing Bulls – will replace Horner as team principal, the statement added.

Horner had been Red Bull’s team principal since it joined F1 in 2005.

During the Brit’s time in charge, Red Bull has had tremendous success, winning eight drivers’ and six constructors championships.

The team won four consecutive drivers’ world titles with Sebastien Vettel between 2010 and 2013 and Max Verstappen has become the current dominant force in F1, winning the last four championships.

Red Bull had 124 Grand Prix wins, 107 pole positions and 287 podium finishes with Horner at the helm.

In recent years, Horner’s time with Red Bull has been controversial.

Red Bull launched an independent investigation in February last year after Horner was accused of engaging in inappropriate behavior towards a member of the racing team, who has not been identified.

Horner was later cleared of wrongdoing and reiterated his denial of the allegations after alleged leaked messages were distributed to members of the F1 community in a Google Drive. CNN has been unable to corroborate the messages’ authenticity and Red Bull previously said it would be “inappropriate” to comment on the matter.

Horner’s firing comes amid rumors that Verstappen could leave Red Bull at the end of this season.

Verstappen has been linked with a move to Mercedes, despite having a contract with Red Bull until 2028.

The Dutch driver, though, has repeatedly turned down the opportunity to comment on his future. Horner had previously been steadfast in his belief that Verstappen would remain with Red Bull.

The 2025 season has seen Red Bull struggle on the track too, with Verstappen sitting third in the drivers’ championship standings, 69 points behind McLaren’s Oscar Piastri, with just two Grand Prix victories in 2025.

Red Bull currently sits fourth in the 2025 constructors’ championship, 288 points behind McLaren.



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