Asian Stocks Slip As Trump Jolts Market With New Tariff Threats
The S&P 500 index and tech-heavy Nasdaq Composite rose 0.30% and 0.27%, respectively. The Dow Jones Industrial Average advanced 0.99%.
Stocks in the Asia-Pacific region tumbled in early trade after US President-elect Donald Trump vowed to impose fresh tariffs on China and US' border countries, Mexico and Canada.
Equity benchmarks in Japan and South Korea led the decline during the session's opening. The Nikkei was 334 points, or 0.86%, lower at 38,541, while the S&P ASX 200 was down 29 points, or 0.34%, at 8,388 as of 5:45 a.m.
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. This measure was to cut down migrants and illegal drugs flowing across US borders, he said.
Trump justified this tariff hike in China as the South Asian country failed to follow through on promises to institute the death penalty for traffickers of fentanyl. "Drugs are pouring into our Country, mostly through Mexico, at levels never seen before.”
He said that he would sign an executive order on his first day in office to impose a 25% tariff on “all products” from Mexico and Canada.
China's benchmark indices will be closely watched out for after this new threat from its Western counterpart after the CSI 300 closed 0.46% lower on Monday.
Scott Bessent, who was a partner at Soros Fund Management and runs macro hedge fund Key Square Group, was picked by Trump last week as the US Treasury Secretary and indicated he will back the President-elect's tariff and tax cut plans. Stocks in the US surged following this announcement.
The S&P 500 index and tech-heavy Nasdaq Composite rose 0.30% and 0.27%, respectively. The Dow Jones Industrial Average advanced 0.99%. The Bitcoin rally stalled following a surge towards $100,000 that ended just short of the record mark.
The dollar index, which tracks the greenback's performance against a basket of 10 leading global currencies, extended its decline giving space for a breather in Asian currencies. The dollar was down 0.69% at 106.81. The dollar index typically doesn't go higher than its current level of 107, and it is moving into overvalued territory, Julius Baer's Head of Research, Asia, Mark Matthews told NDTV Profit earlier.
The US Fed is expected to release the FOMC meeting minutes on Tuesday while the US GDP data will be out on Wednesday.
The crude oil prices saw a shape decline after Israel said that it had edged closer to a cease-fire agreement with Hezbollah. The Brent crude was trading 2.87% lower at $73.01 a barrel as of 6:00 a.m. IST, and the West Texas Intermediate was down 0.39% at $68.67.
