Tuesday trading saw Asian shares rise after stocks on Wall Street recorded closing lower as US President Donald Trump’s administration sent out notices to 12 trade partners, threatening them of increased tariffs if trade deals with the White House weren’t finalised by August 1.
Japan’s Nikkei 225 added 0.3 per cent to 39,724.90, while South Korea’s Kospi surged 1.8 per cent to 3,115.38.
Meanwhile, Hong Kong’s Hang Seng index climbed 0.7 per cent to 24,047.40 while the Shanghai Composite gained 0.7 per cent to 3,497.40. Only Australia’s S&P/ASX 200 edged 0.1 per cent lower to 8,590.70.
Also Read: Tesla shares down by 7 per cent
Stephen Innes, managing partner at SPI Asset Management, noted that Asian markets had treated Trump’s latest slew of tariff threats as “background noise” than “breaking noise”.
“Markets didn’t lurch because they’ve seen this show before. Tariff hike, rhetoric spikes, and then — like clockwork — comes the sudden pivot: We’re still open to talks.'”
On Wall Street on Monday, the S&P 500 fell 0.8 per cent for its biggest loss since mid-June. The benchmark index remains near its all-time high set last week.
The Dow Jones Industrial Average gave back 0.9 per cent, while the Nasdaq composite also finished 0.9 per cent lower, not too far from its own record high.
The losses were so widespread that decliners outnumbered gainers by nearly 4 to 1 on the New York Stock Exchange.
Tesla’s 6.8 per cent tumble was the biggest among S&P 500 stocks as the feud between Trump and former ally Elon Musk reignited over the weekend.
Musk, once a top donor of Trump, said he would form a third political party in protest over the Republican spending bill that passed last week.
Monday saw the Trump administration stepping up pressure on its trade partners with new letters informing its two crucial Asian allies – Japan and South Korea – of 25 per cent tax levy on their goods from August 1.
Trump also announced new tariff rates on Malaysia, Kazakhstan, South Africa, Laos and Myanmar.
In April, Trump postponed levying heavy tariffs on goods imported from nearly every country for 90 days, and declared the US was open for talks to strike new trade deals.
But before the July 9 expiry of the 90-day exemption period, Trump extended the deadline to August 1. In a post on his social media platform, Truth Social, late Sunday, Trump said any country that aligns itself with what he termed “the Anti-American policies of BRICS” would be levied an added 10 per cent tariff.
BRICS member nations include Brazil, Russia, India, China, South Africa, Egypt, United Arab Emirates, Ethiopia, Indonesia, and Iran. Saudi Arabia has also been invited to join.
Japan’s Mizuho Bank Ltd, in a commentary, said the three-week extension in the tariff deadline “is a distraction from festering, and possibly widening, tariff risks.”
With Trump’s latest announcement, the threat of higher tariffs looms over the global economy, also threatening to hinder economic growth.
In other dealings on Tuesday, benchmark US crude oil lost 18 cents to $67.75 per barrel. Brent crude, the international standard, gave up 14 cents to $69.44.
The dollar was trading at 146.07 to the Japanese yen, slightly up from 146.01 yen. The euro rose to $1.1737 from $1.1714.
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