Asia: Stocks fall as Trump fires fresh volley in trade war
[HONG KONG] Asian stocks sank on Monday (Jun 2) after US President Donald Trump last week lobbed a fresh trade missile by doubling tariffs on steel and aluminium and accused China of violating last month's agreement to slash tit-for-tat levies.
The US president's comments were followed by claims by his commerce secretary that Beijing had been slow to implement the deal, which helped rally markets last month and fanned hopes for a lasting detente between the world's top economies.
Still, Treasury Secretary Scott Bessent – who last week warned negotiations with China were 'a bit stalled' – said the US leader could speak with his Chinese counterpart Xi Jinping 'very soon' in talks that could help break the impasse.
The latest salvos from the White House came as it faces a legal battle after a trade court on Wednesday blocked Trump's 'Liberation Day' tariff blitz, saying he had overstepped his authority with the across-the-board taxes.
An appeals court gave the levies a stay of execution on Thursday but the wrangle could drag on, causing more uncertainty.
Trump said on Friday that he would jack up steel and aluminium to 50 per cent, from 25 per cent, which he said 'will even further secure the steel industry'.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
He also claimed Beijing had 'totally violated' last month's agreement with China to cut eye-watering tariffs for 90 days to hammer out a broader package.
Later, Commerce Secretary Howard Lutnick told Fox News Sunday that Beijing had been 'slow-rolling the deal'.
Chinese officials accused Washington of making 'bogus charges and unreasonably accused China of violating the consensus, which is seriously contrary to the facts'.
The developments have thrown the trade war back into the spotlight, having been put on the back burner after the China detente and indications that governments were working deals with US officials.
'As we await whether the 90-day truce will result in a more permanent resolution, we are left wondering what may happen if progress stalls and the US and China are unable to make a deal,' said Kai Wang, Asia equity market strategist at Morningstar.
'Trump is already making headlines again on reimposing EU tariffs.
'Should this happen with the EU or China, markets will likely crater again and will see much greater volatility given the heightened uncertainty with regard to global growth.'
Asian markets sank on Monday as investors brushed off data showing the Federal Reserve's favoured inflation gauge cooled more than expected last month, with fears about the impact of the tariffs on the economy back in focus.
Hong Kong dropped more than two per cent, with property firms taking a heavy hit on worries over the future of New World Development after it deferred interest payments on some bonds.
The firm is in the middle of a loan refinancing drive as it looks to raise more than US$11 billion from banks. Its struggles have revived fears about China's property sector as companies struggle to sell stock to help pay off their bulging debts.
Tokyo, Sydney, Singapore, Taipei, Manila and Jakarta also fell, with Shanghai closed for a holiday.
Oil prices surged after Opec and other key producers hiked output for July but less than expected, while geopolitical fears were ramped up after Ukraine hit air bases deep inside Russia, raising concerns over an escalation of the three-year war.
The US dollar also retreated on concerns about the US economy as Trump continues to push a bill to extend tax cuts and slash welfare spending, which observers say will add trillions to the already gargantuan national debt.
That has sent shivers through the Treasuries market, with yields pushing higher as investors seek out better returns for lending the government money.
Worries about US debt led Moody's to lower the United States last top-ranking credit rating, warning it expects US federal deficits to widen dramatically over the next decade.
Meanwhile, JPMorgan Chase chief executive Jamie Dimon voiced concern on Sunday at the risk of a looming US debt market crisis sparked by Trump's policies.
'It's a big deal. It is a real problem,' Dimon told Maria Bartiromo on FOX Business Network's Mornings with Maria show, according to an excerpt of the interview that will air in full Monday.
'The bond market is going to have a tough time. I don't know if it's six months or six years,' he said. AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
27 minutes ago
- Straits Times
Official involved in withholding Ukraine aid confirmed for US Defense post
FILE PHOTO: The Pentagon building is seen in Arlington, Virginia, U.S, April 6, 2023. REUTERS/Tom Brenner/File Photo Official involved in withholding Ukraine aid confirmed for US Defense post WASHINGTON - The U.S. Senate on Tuesday confirmed Michael Duffey, who in President Donald Trump's first administration asked the military to withhold aid to Ukraine, to be undersecretary of defense for acquisition and sustainment. On the day that one of Ukrainian President Volodymyr Zelenskiy's top aides visited Washington, the Senate voted 51-45, along party lines with Trump's fellow Republicans backing the nominee, to confirm Duffey as the official overseeing the Pentagon's weapons programs. Democrats sought testimony from Duffey during Trump's first term as president after an email showed him, in his role as a senior White House official in the Office of Management and Budget, directing the Pentagon to withhold security aid for Ukraine that had been approved by Congress. The inquiry, which led to Trump's first impeachment, focused on Trump's request that Zelenskiy investigate the president's political rival, Joe Biden, the former Democratic vice president who would defeat Trump in the 2020 election. Democrats who impeached Trump said he had withheld the aid to put pressure on Zelenskiy's government to agree to an investigation. Trump denied wrongdoing, accusing Democrats of seeking to overturn his 2016 election victory. Most congressional Republicans called the impeachment process unfair. Russia launched its full-scale invasion of Ukraine in February 2022. Trump was elected to his second term as president in November 2024. In his second term, Trump has put intense pressure on Ukraine - including by briefly halting military aid - to come to the bargaining table with Russia. Those efforts have so far not yielded a ceasefire or significant progress toward a broader peace deal. Duffey's confirmation vote came the same day that Andriy Yermak, Zelenskiy's chief of staff, arrived in Washington together with the first deputy prime minister and other government officials. Yermak was expected to meet with U.S. officials including Secretary of State Marco Rubio and members of Congress. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
an hour ago
- Straits Times
Top Cuban official accuses US of escalating tensions, raises concerns of conflict
WASHINGTON - A visiting senior Cuban official on Tuesday accused the Trump administration of ratcheting up tensions between Washington and Havana and expressed concerns that the U.S. was trying to provoke a military confrontation. Speaking to reporters at the Cuban Embassy in Washington, Johana Tablada, deputy director for U.S. affairs in Cuba's foreign ministry, said an armed clash between the two old Cold War rivals was "not a good idea" and that the Cuban government was trying to ease the situation but that the U.S. appeared determined to further damage relations. Tablada said new Trump administration measures targeting Communist-ruled Cuba intend to "dynamite our relation(ship) to really provoke a rupture of relation, and even to create conditions, in my opinion, for, if necessary, a military confrontation." Republican U.S. President Donald Trump and his top officials have taken a hardline approach to Cuba since he took office in January, returning longtime foe Cuba to a U.S. list of State Sponsors of Terrorism, tightening rules on remittances, and shutting off migration programs that allowed some Cubans to work in the U.S. legally. Trump officials have not publicly threatened any military action. The U.S. State Department did not immediately respond to a request for comment. U.S. Chief of Mission Mike Hammer - the top U.S. diplomat in Havana - has traveled the island widely in recent months to meet with political dissidents, raising the ire of the Cuban government, which accuses him of seeking to foment unrest. Cuba's foreign ministry last week issued a verbal warning to Hammer, saying he had incited "Cuban citizens to commit serious criminal acts, attack the constitutional order, or encourage them to act against the authorities," calling his actions a violation of the Vienna Convention norms on diplomatic relations. Tablada accused Hammer of channeling U.S. humanitarian funds to undermine the Cuban government and said Cuban diplomats would not be allowed to engage in similar behavior in the U.S. 'To push both countries into scenarios of confrontation and collision is not a good idea,' she said. Just days before Trump took office in January former President Joe Biden's administration removed Cuba from its terrorism blacklist, effectively reversing sanctions from Trump's first term. After returning to office, Trump quickly returned Cuba to the blacklist and also reinstated many of the restrictions on trade and travel that Biden had eased. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
an hour ago
- Straits Times
Katong Plaza and Novotel on Kitchener Rd to be redeveloped
Katong Plaza and Novotel Singapore on Kitchener hotel were in the past two years sold to new owners. ST PHOTOS: AZMI ATHNI, ARIFFIN JAMAR New hotels to replace Katong Plaza and Novotel hotel in Kitchener Road SINGAPORE – The Novotel Singapore on Kitchener hotel and Katong Plaza are set to be replaced by new hotels. Both properties date back to around 1981, with the Kitchener Road hotel branded with different names along the way. They were in the past two years sold, and the new owners have recently secured at least provisional planning approvals from the Urban Redevelopment Authority (URA). Worldwide Hotels subsidiary Midtown Development has permission to redevelop the Kitchener Road property into a hotel with 1,625 rooms and 1,214 sq m of retail space. The hotel opened in 1981 as President Merlin Hotel – a part of the President Hotel and Shopping Complex that also included the President Shopping Centre which opened in 1970. The hotel was later rebranded as New Park Hotel in 1990 after a $30 million facelift. In 2007, it became Parkroyal on Kitchener Road, while the shopping centre was demolished in 2017 to make way for Centrium Square. In 2023, UOL sold Parkroyal on Kitchener Road for $525 million to Worldwide Hotels, a Singapore-based firm that owns chains such as Hotel 81 and Hotel Mi. The hotel reopened in November that year as the 543-room Novotel Singapore on Kitchener , a brand under French multinational hospitality company Accor . The hotel is on a freehold 7,780.1 sq m site and has a gross floor area of 37,827.71 sq m. A spokesperson for Worldwide Hotels told The Straits Times on June 3 that it is unable to share further details about the new hotel. Katong Plaza in Brooke Road, which opened around the start of 1981 , is set to make way for a hotel with 374 rooms and 537 sq m of retail space. The strata-titled mixed-use development near Marine Parade MRT station with 132 retail units and 14 residential apartments was in 2024 sold to Fragrance Group for $180 million . At the time of the sale, the building's owners had outline permission from the URA to convert it for hotel use. The existing building is on a freehold 3,162 sq m site and has a gross floor area of 9,488 sq m. The Fragrance Group did not respond to requests for comment. When ST visited the building on May 30, most of the retail tenants had vacated their units. Some were packing up and said they had to leave by end-June. A notice dated April 16, put up alongside minutes of the building's collective sale committee's meetings, stated that owners choosing to stay in the building until July 2025 will be responsible for covering all expenses such as air-conditioner and lift maintenance fees. Traditional Chinese medicine practitioner John Ng, 70, who has operated a clinic in the mall since April 2006, said he is disappointed to leave behind neighbours of almost two decades. 'We all knew each other and were very friendly. Everyone trusted each other and I could leave my clinic unattended, knowing others would help to keep watch,' said Mr Ng. He was in the process of relocating his clinic to Kreta Ayer in Chinatown . Items at a traditional Chinese medicine clinic being kept on May 31, ahead of the closure of Katong Plaza. ST PHOTO: AZMI ATHNI Mr Alan Cheong, Savills Singapore's executive director of research and consultancy, expects that the Katong site will house a mid-tier hotel, given the planned number of rooms. He also pointed out that the Kitchener Road hotel is likely to be an economy-tier type geared towards mass market tourism. He added that Worldwide Hotels' plan to triple the number of rooms is 'logical', as the move will help to boost its earnings. Asked if there is sufficient demand for rooms in the Farrer Park and Marine Parade areas to justify the planned supply, analysts said Singapore's hotel market has performed strongly in the past 12 to 18 months. Mr Edwin Loo, an associate director at real estate consultancy Cistri, said: 'Much of this growth is in the mid-market and upscale segments, reflecting Singapore's success in attracting event-focused visitors as well as visitors from emerging Asia who are willing to spend but remain price-sensitive given Singapore's relatively higher room rates when compared with other regional destinations.' But he noted that the site of Katong Plaza, which is next to Roxy Square, is relatively long and narrow. Mr Edwin Loo, an associate director at real estate consultancy Cistri, felt that the planned redevelopment of Katong Plaza would be boosted if neighbour Roxy Square is also roped in. ST PHOTO: AZMI ATHNI 'An integrated development incorporating both of these sites would have resulted in a better outcome in terms of land optimisation and urban design, especially considering the need to accommodate the extensive pickup, drop-off and coach parking requirements at the ground level and the potential for a larger site to provide greater amenity for the community,' he said. Ng Keng Gene is a correspondent at The Straits Times, reporting on issues relating to land use, urban planning and heritage. Join ST's WhatsApp Channel and get the latest news and must-reads.
