Trump’s Tariff Announcement Spikes Uncertainty, Asian Markets Slip
In a last-minute move ahead of a self-imposed deadline, U.S. President Donald Trump revealed sweeping tariff plans on Thursday, dampening Asian markets amid strong tech earnings.
The U.S. leader announced a raft of levies on trading partners who failed to secure agreements with the White House. Trump’s “Liberation Day” tariffs, initially unveiled in April, included a blanket 10% rate, with targeted “reciprocal” ones following shortly after. Implementation dates have been shifted multiple times, with the latest deadline falling on Friday.
Countries reached agreements to avoid tariffs included Japan, the European Union, Britain, and South Korea. China, however, remains in talks to extend an existing fragile truce. For those not spared, the measures range from 10% to 41%.
Canada was singled out for a 35% tariff hike, with Trump citing concerns over cross-border drug issues and Ottawa’s Palestinian state recognition plan. Taiwan faces 20% “temporary” duties, while Cambodia accepted a 19% rate.
Asian markets reacted gloomily to the news, with Tokyo, Hong Kong, Shanghai, Sydney, Wellington, and Taipei all retreating. Seoul was particularly hard hit, sliding over 3%, as the South Korean government contemplates raising corporate and stock investor taxes. Singapore, Manila, and Jakarta bucked the trend with gains.
Lorraine Tan, Morningstar’s director of equity research in Asia, downplayed the impact: “The tariffs are relatively expected for Asia… The markets should shrug this news off.”
Market losses followed a Washington sell-off, as traders tempered expectations for a September interest rate cut following an unexpected inflation spike. Meanwhile, major tech giants reported robust earnings, with Apple, Amazon, Google, Microsoft, and Meta all posting strong results. However, earnings were overshadowed by tariff uncertainty.
Currency markets saw the Taiwan dollar increase to 30 to the greenback for the first time since June, while the yen remained under pressure.
Key figures at around 0300 GMT:
- Tokyo – Nikkei 225: DOWN 0.4% at 40,9914.66 (break)
- Hong Kong – Hang Seng Index: FLAT at 24,775.34
- Shanghai – Composite: FLAT at 3,573.01
- Euro/dollar: DOWN at $1.1412 from $1.1421 on Thursday
- Pound/dollar: DOWN at $1.3196 from $1.3208
- Dollar/yen: UP at 150.78 yen from 150.68 yen
- Euro/pound: UP at 86.49 pence from 86.43 pence
- West Texas Intermediate: DOWN 0.1% at $69.26 per barrel
- Brent North Sea Crude: DOWN 0.1% at $71.65
- New York – Dow: DOWN 0.7% at 44,130.98 (close)
- London – FTSE 100: DOWN 0.1% at 9,132.81 (close)
Source: AFP
