Asia Stocks Sink as Trump’s Tariff Threats Weigh on Confidence
Stocks in Asia tumbled Monday as investors braced for a week of market tumult caused by the expected announcement of yet more tariffs by President Trump on America’s biggest trading partners.
Since taking office a little over two months ago, Mr. Trump has kept investors and companies guessing with a haphazard rollout of what he calls an “America First” trade policy. He has threatened, imposed and in some cases then paused the start of new tariffs on goods coming into the U.S.
On Monday, stocks in Japan and Taiwan fell more than 4 percent, while share prices in South Korea were down 3 percent. Technology companies were hit hard: Chipmakers Taiwan Semiconductor Manufacturing Company, SK Hynix, Samsung and Tokyo Electron recorded declines.
Losses in China were more muted. Hong Kong stocks dropped more than 1 percent and those in mainland China were about 0.5 percent lower. Chinese markets have generally done better than others in Asia this year because of enthusiasm about the country’s tech companies. On Monday, mainland stocks got some support from a report signaling that China’s export-led industrial sector continues to expand despite Mr. Trump’s initial tariffs.
Futures on the S&P 500, which allow investors to trade the benchmark index before exchanges reopen in New York in the morning, slumped. On Friday, the S&P 500 dropped 2 percent on concerns that Mr. Trump’s tariffs could recharge inflation and dampen consumer sentiment.
Mr. Trump has imposed tariffs to make imports more expensive in industries like automobiles, arguing that the trade barriers will spur investment and innovation in the United States. He has also used tariffs, and their threat, to try to extract geopolitical concessions from countries. He has further unnerved investors by saying he does not care about the fallout of his actions on markets or American consumers, who will have to pay more for many goods if import prices rise.
Over the weekend, Mr. Trump ramped up the pressure, threatening so-called secondary sanctions on Russia if it does not engage in talks to bring about a cessation of fighting in Ukraine. The tactic echoes similar sanctions concerning Venezuela. He said last week that any country buying Venezuelan oil could face another 25 percent tariff on its imports to the United States.
The threats over the weekend add to tariffs of 25 percent on imported cars and some car parts set to be implemented this week, barring any last minute reprieve. That’s in addition to previously delayed tariffs on Mexico and Canada, as well as the potential for further retaliatory tariffs on other countries.
Adding to investors’ angst is the scheduled release on Friday of the monthly report on the health of the U.S. jobs market. It could provide another reading of how the Trump administration’s policy pursuits are weighing on the economy.
Keith Bradsher contributed reporting.
