Most Asian stocks declined on Tuesday after U.S. President-elect Donald Trump threatened to impose additional trade tariffs on China and other countries, ramping up fears of a renewed trade war. Trump said on his Truth Social network that he would impose an additional 10% tariff on goods from China and 25% on all products from Mexico and Canada.
Japan’s Nikkei index declined 1.2%, while the Shanghai Composite lost 1.3%. South Korea’s KOSPI fell 0.6%, while Thailand’s SET index inched 0.2% lower. India’s NIFTY index pointed to a weak open, as a two-day rally in the Indian benchmark now appeared to be cooling.
Despite Trump’s tariff threat, Chinese shares were positive, with the Shanghai Composite and Shenzhen Component indexes rising 0.3% and 0.4%, respectively. Hong Kong’s Hang Seng index gained 0.6%.
UBS analysts said in a Monday note that Chinese fiscal measures were likely to dampen the impact of any potential trade tariffs. Beijing is also expected to impose retaliatory measures against the U.S.
South Korea’s central bank is set to decide on interest rates on Wednesday, while Japan’s capital spending data will be released on Friday. India will release its GDP report on Friday, while China will release November inflation data on Saturday.
In the U.S., the Federal Reserve’s preferred measure of inflation, the PCE price index, is due on Wednesday.
