Asian markets fell in early trading Tuesday after the Trump administration sparked trade tensions on new fronts.
President Donald Trump said Monday morning he will reinstate tariffs on Brazilian and Argentinian steel, accusing both countries of devaluing their currencies. Later, the Office of the U.S. Trade Representative threatened to impose tariffs of up to 100% on about $2.4 billion in French imports in retaliation for taxes on U.S. tech companies.
“The U.S. administration continues to play the risky game of weaponizing U.S. economic power with tariffs,” Stephen Innes, chief Asia market strategist with AxiTrader, said in a note Monday. “Also, investors are getting a bit anxious about whether the U.S. will postpone the imposition of more tariffs on Chinese products planned for Dec. 15.”
Japan’s Nikkei NIK, -0.61% fell 0.7% and Hong Kong’s Hang Seng index HSI, -0.11% slipped 0.2%. The Shanghai Composite SHCOMP, -0.33% retreated 0.3% while the Shenzhen Composite 399106, -0.32% dropped 0.3%. South Korea’s Kospi 180721, -0.47% declined 0.4% while benchmark indexes in Taiwan Y9999, +0.11% , Singapore STI, -0.23% and Indonesia JAKIDX, +0.07% were mixed. Australia’s S&P/ASX 200 XJO, -2.15% slid 1.9% as the Reserve Bank of Australia kept rates unchanged, as expected.
Among individual stocks, SoftBank 9984, -2.22% sank in Tokyo trading, as Nissan 7201, -1.23% and robotics maker Fanuc 6954, -0.75% also fell. Nintendo 7974, +2.54% rose after a report that its Switch videogame console were a hit with Black Friday shoppers in the U.S. In Hong Kong, Apple component makers AAC 2018, +3.33% and Sunny Optical 2382, +1.09% rose while CSPC Pharmaceutical 1093, -2.13% and food processing company WH Group 288, -2.21% fell. Chip maker SK Hynix 000660, -1.74% declined in South Korea, as did Hyundai Heavy Industries 009540, -1.23% , after its planned merger with shipbuilding giant Daewoo Shipbuilding & Marine Engineering Co. 042660, +1.35% ran into regulatory problems in Singapore. In Australia, Westpac WBC, -1.30% , Commonwealth Bank CBA, -2.33% and National Australia Bank NAB, -1.83% all fell.
U.S. stocks fell their most in about eight weeks on the renewed trade jitters and manufacturing data that showed a continued contraction in November.
The negotiations to end the longstanding trade war could face a tougher path this month following a flareup over Hong Kong.
China said Monday it will suspend U.S. military ship and aircraft visits to the semi-autonomous territory. It also plans to sanction several American pro-democracy groups in retaliation for passage of legislation supporting months’ long anti-government protests.
The law, signed last Wednesday by President Donald Trump, mandates sanctions on Chinese and Hong Kong officials who carry out human rights abuses and requires an annual review of the favorable trade status that Washington grants Hong Kong.
“Perhaps the market will now hold the champagne corks that it has been popping for months now in expectation that all is well,” Rabobank said in a report.
Benchmark crude oil CLF20, +0.34% gained 22 cents to $56.18 a barrel in electronic trading on the New York Mercantile Exchange. It rose 79 cents to $55.96 a barrel on Monday. Brent crude oil BRNG20, +0.23% , the international standard, gained 18 cents to $61.10 a barrel.
The dollar USDJPY, +0.19% rose to 109.20 Japanese yen from 109.00 yen on Monday.