Asia-Pacific markets experienced a significant downturn on Thursday following President Donald Trump’s announcement of substantial reciprocal tariffs affecting over 180 countries and territories, many of which are within the region. According to charts the White House released on social media, these tariffs respond to claimed foreign tariff rates, currency manipulation, and trade barriers impacting American goods. Notably, the new tariffs on China will augment existing duties to a rate of 54%, while imports from India, South Korea, and Australia will encounter tariffs of 26%, 25%, and 10%, respectively.
Chris Kushlis, Chief Emerging Markets Macro Strategist at T. Rowe Price, noted that these tariff hikes represent a significant increase in tariffs on Asian exports, exceeding market expectations. With the U.S. accounting for roughly 15% of the region’s exports, Kushlis cautioned that these elevated tariffs could create substantial challenges to economic growth, particularly for countries with trade-dependent economies. He also pointed out that many Asian nations have a high percentage of their export value reliant on the U.S., making it difficult to redirect trade amid these broad tariff measures.
While China maintains the largest trade deficit with the U.S., it does not face the highest reciprocal tariffs, according to Stephen Dover, head of Franklin Templeton Institute. Instead, several Southeast Asian countries, having previously benefited from tariffs on China, are now faced with steep reciprocal tariffs.
The Nikkei 225 index in Japan led the region’s market losses, dropping 3.10% after initially falling more than 4%. The broader Topix index declined 3.48%. In Hong Kong, the Hang Seng Index decreased by 1.58%, while mainland China’s CSI 300 slipped 0.71%. South Korea’s Kospi dropped 0.94%, scaling back from an earlier 3% loss, and the Kosdaq was down 0.21%. Australia’s S&P/ASX 200 decreased by 0.89% in its last trading hour. India’s Nifty 50 and BSE Sensex indices also opened lower, down 0.34% and 0.46%, respectively.
Amid these tariff concerns, spot gold reached a record high, trading at $3,148.84 per ounce at 11:58 a.m. Singapore time, as investors sought refuge in the precious metal.
Looking forward, Dover emphasized that the effectiveness of these tariffs may depend on whether they lead to higher consumer prices. He warned that the average American family could see an increased financial burden of up to $4,200 annually given an average tariff rate of 20%, potentially slowing household and business spending, and increasing the risk of adverse economic impacts in the U.S. by 2025.
U.S. stock futures saw significant declines as Trump’s expansive tariffs elevated fears of a global trade war that could further challenge an already decelerating U.S. economy. Despite this, U.S. markets closed on a positive note after another volatile trading session. The S&P 500 rose 0.67% to 5,670.97, while the Nasdaq Composite climbed 0.87% to 17,601.05. The Dow Jones Industrial Average gained 235.36 points, or 0.56%, settling at 42,225.32. Additionally, shares of Tesla surged 5.3% amid reports that CEO Elon Musk may be stepping back from certain executive duties, as indicated by President Trump to his cabinet.
— Reporting contributions from CNBC’s Brian Evans and Sean Conlon.
Original Source: https://www.cnbc.com/2025/04/03/asia-markets-live-stocks-set-to-fall.html
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Publish Date: 2025-04-03 09:52:00
