ASIAN markets fell at the open on Monday (Feb 3) after US President Donald Trump announced tariffs on goods from China, Canada and Mexico over the weekend.
As at 10 am on Monday, Hong Kong’s Hang Seng Index fell 1.7 per cent, Australia’s ASX 200 fell 1.6 per cent, Japan’s Nikkei 225 traded 2.1 per cent lower, and South Korea’s Kospi Composite Index lost 2.7 per cent.
Taiwan’s Taiex dropped more than 3 per cent upon resumption of trade after the holidays. Taiwan Semiconductor Manufacturing Company fell over 6 per cent and Hon Hai Precision Industry declined more than 7 per cent in early trade, as investors fled those shares following the rout in the US – notably Nvidia, and some global markets on the shake-up by Chinese artificial intelligence company DeepSeek.
Singapore’s Straits Times Index fell sharply by 1.5 per cent, but pared losses marginally to recover to 0.6 per cent, as at 10.05 am, while Malaysia’s FTSE Bursa Malaysia Kuala Lumpur Composite Index traded 0.3 per cent lower.
China markets remained closed for the Chinese New Year holiday.
On Saturday in the US, Trump ordered 25 per cent tariffs on Canadian and Mexican imports and 10 per cent on goods from China starting on Tuesday, to address a national emergency over fentanyl and illegal immigration to the US.
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Energy products from Canada, however, face a reduced 10 per cent duty, following concerns from oil refiners.
Mansoor Mohi-uddin, chief economist at the Bank of Singapore, said: “Trump’s early strike, just two weeks into his four-year term, is likely to hit investor confidence.”
He added that the consensus was that expected US tariffs would threaten the economic outlook only in the second half of this year, after lengthy negotiations first between the US and its main trading partners.
IG market strategist Yeap Jun Rong noted that the uncertainty over how long trade tensions may persist, along with the possibility that additional economies such as the European Union could also be targeted by US tariffs, may trigger a wave of de-risking across global equities.
“The pace of escalation could catch markets off guard as well, with market participants quickly pricing in higher global growth risks into the new week.”
Canada has hit back with a 25 per cent tariff on US imports starting on Tuesday. Mexico also indicated it will impose retaliatory tariffs, without mentioning any rate or products.
Meanwhile, China said it would file a lawsuit with the World Trade Organization and take necessary countermeasures to safeguard its rights and interests.
“While concrete details are less clear at the current point in time, (this) raises the prospect of a prolonged tit-for-tat trade war,” said Yeap.
Ahead of the implementation of tariffs, Wall Street stocks ended lower last Friday. The S&P 500 lost 0.5 per cent, the Nasdaq Composite closed 0.3 per cent lower, and the Dow Jones Industrial Average fell 0.8 per cent.
On the other hand, shares in Europe closed at a record high, led by gains in technology stocks. The pan-European Stoxx 600 index closed 0.1 per cent higher.
