Asian Stocks Decline as Trump Threatens Additional Trade Tariffs
Asian stock markets declined on Tuesday as US President-elect Donald Trump threatened to impose additional trade tariffs on China and other countries, sparking concerns of a renewed trade war.
Trump made the announcement on his social media platform, stating that he would impose a 10% tariff on goods from China and a 25% tariff on all products from Mexico and Canada to combat illegal drugs and migrants. The move was seen as a surprise, as many had expected a more moderate approach to trade policy under Trump.
The news sent stock indexes plummeting, with the Japanese Nikkei 225 falling 1.2%, the Kospi declining 1.3%, and the Thai SET Index falling 0.6%. The South Korean KOSPI 200 index was down 0.6%, while the Indian Sensex was also lower, amid concerns over the Adani Group’s allegations of bribery and fraud.
However, Chinese stocks bucked the trend, with the Shanghai Composite Index rising 0.3% and the Shenzhen Component Index gaining 0.4%. Hong Kong’s Hang Seng Index also rose 0.6%, as investors remain optimistic about Beijing’s plans to introduce more fiscal stimulus to offset the impact of tariffs.
The threat of a renewed trade war between the US and China is expected to have significant implications for global trade, potentially disrupting supply chains and impacting Asian economies. Additionally, the US Federal Reserve’s preferred inflation measure, the PCE price index, is set to be released on Wednesday, which could also impact market sentiment.
