Asian markets drop amid Trump’s tariff threats

Asian stocks fell on Tuesday following US President-elect Donald Trump’s threat to increase trade tariffs on China and other countries, sparking concerns of a trade war.

Trump announced on Truth Social that he plans to impose a 10 per cent tariff on Chinese goods and a 25 per cent tariff on products from Mexico and Canada to address border security issues.

The markets had risen earlier on news of Scott Bessent’s nomination as Treasury Secretary, seen as a more moderate voice on trade tariffs. Investors hope he will advocate for Wall Street interests in Washington.

Japan’s Nikkei 225 and TOPIX indexes declined by 1.2 per cent and 1.3 per cent, respectively, while South Korea’s KOSPI fell by 0.6 per cent.

Thailand’s SET Index edged down by 0.2 per cent, and Indian markets were poised for a weak open, with Nifty 50 futures indicating a negative start.

Adani Group shares continued to face pressure following allegations of fraud. Australia’s S&P/ASX 200 index dipped 0.4 per cent after reaching a record high the previous day.

The Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose by 0.3 per cent and 0.4 per cent, respectively, and the Hang Seng index gained 0.6 per cent.

China is facing economic challenges due to increased trade tariffs, but Beijing is planning to introduce more fiscal stimulus to counter the impact.

Investors are closely watching for additional fiscal measures during two upcoming political meetings in December. UBS analysts believe that Chinese fiscal policies will help mitigate the effects of potential trade tariffs.

Beijing is also expected to retaliate against the US in response. The possibility of a new Sino-US trade war could disrupt global trade and affect China’s export dominance and other Asian economies.

Attibution: Investing.com

Subediting: M. S. Salama