HONG KONG– Most Asian markets were mixed on Tuesday after Donald Trump confirmed he will thump China with another round of tariffs, turning up the heat on the trade battle between the world’s two biggest economies, AFP reports.
Investors had been unloading stocks on Monday after reports the president would press ahead with his fight against what he calls Beijing’s unfair practices.
The latest volley from the White House will see $200 billion worth of goods taxed at 10 percent from September 24, going up to 25 percent from January 1 if the sides are unable to hammer out a deal.
He also said he had lined up another $257 billion of imports if Beijing retaliates, as it is expected to do. That would mean with $50 billion of goods already being hit, Trump will have subjected virtually all goods China ships to the US to tariffs.
Expectations of the announcement sent US markets lower, with technology firms among the big losers. Apple, Google parent Alphabet and Facebook were all sharply down.
However, the tariffs had largely been expected and some key import items had been left off the list of targets but dealers continue to worry, as the chances of an all-out trade war grow.
“It appears that the administration responded to some industry concerns, but for many American businesses and consumers this still represents a rapid acceleration of costs and much higher uncertainty,” Rufus Yerxa, president of the National Foreign Trade Council, told Bloomberg News.
“Business hates uncertainty. They’d rather have an imperfect trading relationship than this much chaos.” Hong Kong fell 0.7 percent, Sydney lost 0.2 percent and Singapore shed 0.8 percent.
But Shanghai edged up 0.3 percent, Seoul gained 0.1 percent and Tokyo finished the morning 1.1 percent higher.
“While the US tariffs salvo is hardly middling, it’s not as bad as it could have been, so unless China hits with draconian measures, markets should remain supported after this morning’s knee-jerk reactions,” said Stephen
Innes, head of Asia-Pacific trading at OANDA.
“Ultimately the graduated tariff hike allows more room to negotiate before the thumping 25 percent levy gets triggered, so perhaps China may temper their response accordingly.”
The yuan weakened after the announcement, with the central People’s Bank of China already facing accusations from some in the US that it is allowing the currency to drop to offset the effects of the tariffs. The bank denies the claim.
Other high-yielding and emerging market currencies were also taking a hit. Indonesia’s rupiah fell 0.3 percent as it wallows around levels last seen in 1998 during the Asian financial crisis, while the South Korean won,
Australian dollar and Mexican peso were also off.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 1.1 percent at 23,342.85 (break)
Hong Kong – Hang Seng: DOWN 0.7 percent at 26,738.30
Shanghai – Composite: UP 0.3 percent at 2,660.59
Euro/dollar: DOWN at $1.1679 from $1.1685 at 2040 GMT
Pound/dollar: DOWN at $1.3147 from $1.3159
Dollar/yen: UP at 111.90 yen from 111.83 yen
Oil – West Texas Intermediate: DOWN 32 cents at $68.59 per barrel
Oil – Brent Crude: DOWN 34 cents at $77.71 per barrel
New York – Dow Jones: DOWN 0.4 percent at 26,062.12 (close)
London – FTSE 100: FLAT at 7,302.10 (close).