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Yahoo
09-04-2025
- Business
- Yahoo
Trump's ‘Liberation Day' tariffs are now in effect—and Asia is taking the hardest hit
Donald Trump's new trading system is here. 'Liberation Day' tariffs went into effect at midnight Eastern time, imposing steep new taxes on goods from Asia, the world's manufacturing center. Asian stock markets mostly fell on Wednesday, ending a brief 'dead cat bounce' across the region's equity markets. Trump's steepest tariffs fall on China, one of the U.S.'s largest trading partners. Tariff rates on China now total at least 104%: 20% tariffs related to fentanyl, 34% 'reciprocal tariffs,' and then a quickly imposed 50% tariff in response to China's retaliatory measures. The steep tariffs will hit China's exports to the U.S., which will hurt the country's economic growth. On Tuesday, Citi cut its GDP growth forecast to 4.2%, down from 4.7%. China will impose a flat 34% tariff on all U.S. imports on April 10, as part of a broader set of retaliatory measures against Trump's tariffs. Chinese officials have held firm, pledging to 'fight to the end' against Trump's tariffs. The U.S. president has flip-flopped on his openness to a deal with China. In his social media post announcing a new 50% tariff on Chinese goods, Trump stated that all negotiations with China were off. Yet late on Tuesday, he affirmed that 'China also wants to make a deal, badly, but they don't know how to get it started. We are waiting for their call!" Still, Chinese markets performed well on Wednesday. The CSI 300, which covers companies trading in Shanghai and Shenzhen, rose by 1.0%, as Chinese officials promised measures to bolster the stock market, deploying the "national team"—a nickname for sovereign wealth fund Central Huijin Investment—to the Chinese ETF market. Regulators are also encouraging state-owned companies to start share buybacks. Hong Kong's benchmark Hang Seng Index rose around 0.7%, adding to a slight recovery following the market's massive stock drop, the worst since 1997, on Monday. Japan and South Korea, which got tariffs of 24% and 25% respectively, failed to win exemptions in time, despite both major economies being prioritized by the White House for tariff negotiations. Japan's benchmark Nikkei 225 index sunk by 3.9%, while South Korea's KOSPI dropped by 1.7%. Trump officials have signaled some optimism that trade negotiations with Japan and South Korea will continue. 'Things are looking good,' Trump wrote on social media, following a call with Korea's acting president, Han Duck-soo. Seoul is already preparing to support its auto industry, already reeling from 25% U.S. tariffs on imported cars. The government has promised $10.2 billion in support for the industry, and will encourage greater exports to the 'Global South', or markets in Africa, Latin America and Asia. Taiwan's Taiex index dropped by 5.8% on Wednesday, the third straight day of sharp declines after Trump announced 32% tariffs against the island. Shares in Apple supplier Foxconn dropped by 10%, the daily limit, for the third time this week. (Foxconn heavily relies on Chinese factories, like its 'iPhone City' complex in Zhengzhou.) The island has offered to cut its tariffs to zero and boost investment in the U.S.; it's also promised not to retaliate. On Tuesday, the island's government promised to tap into its $15 billion stock stabilization fund to restore investor confidence. High U.S. tariffs on Southeast Asian countries also went into effect on Wednesday. Trump reserved some of his highest tax rates for the region, with Vietnam, Cambodia, Laos, and Myanmar all getting tariffs upwards of 40%. Southeast Asian economies, particularly Vietnam, have benefited from 'China plus one' approaches to supply chain diversification. But that's now threatened by 'Liberation Day' tariffs. GDP growth in Vietnam, which relies on U.S. exports for 30% of its economy, might drop by a full 1.5 percentage points, Goldman Sachs estimated last week. Vietnam has offered to cut its own tariffs on U.S. imports, but Trump officials like trade advisor Peter Navarro have already rejected the offer, as it won't address the underlying trade deficit. Economists argue that countries like Vietnam and Cambodia are just not sufficiently wealthy to buy enough U.S. goods to completely rebalance trade. Leaders across Southeast Asia are now speaking out against Trump tariffs. Singapore prime minister Lawrence Wong on Tuesday blasted the tariffs as 'not actions one does to a friend,' and reaffirmed its status as a free trading hub. Earlier this week, Malaysia prime minister Anwar Ibrahim said he will 'lead efforts to present a united regional front' among the Association of Southeast Asian Nations. This story was originally featured on
South China Morning Post
08-04-2025
- Business
- South China Morning Post
China mounts market intervention as Huijin leads stock purchases amid tariff war
China stepped up its intervention efforts to stabilise its financial markets amid steep losses triggered by an all-out tariff war with the US, calling on at least US$1.3 trillion of funds at state-owned investment vehicles and insurance companies to help stem the worst rout in decades. Advertisement The People's Bank of China (PBOC) on Tuesday said it would provide more liquidity to back purchases by sovereign wealth fund Central Huijin Investment to safeguard local market stability. The National Financial Regulatory Administration said it would allow insurers to use more funds to invest in the stock market, while an array of state-controlled firms stepped up buy-back plans in a move to shore up prices. The CSI 300 Index, which tracks the biggest companies traded in Shanghai and Shenzhen, jumped 1.3 per cent at 2.42pm local time, clawing back some of the 7.1 per cent plunge on Monday. The Hang Seng China Enterprises Index, which crashed 13 per cent on Monday into bear-market territory, rebounded 0.8 per cent in Hong Kong. 'Beijing is sending a clear message [that] they're not going to let this market unravel without a fight,' said Stephen Innes, a managing partner at SPI Asset Management in Bangkok. 'This isn't moral support, it's a full-on monetary airlift.' 02:48 China vows to take 'countermeasures' after Trump's new 50% tariff threat China vows to take 'countermeasures' after Trump's new 50% tariff threat China met US President Donald Trump's 'Liberation Day' 34 per cent tariffs with a matching blow on US goods last week, sending global markets into a seizure on Monday and fanning demand for safe haven assets. The Hang Seng Index, dominated by China's biggest companies, suffered its worst one-day loss since the Asian financial crisis in 1997. Trump has threatened to impose another 50 per cent levy on Chinese goods if Beijing does not remove its tariff, worsening the outlook. Advertisement On Monday, Central Huijin said it bought exchange-traded funds (ETFs) to support the market and would boost its purchases in the future to restore confidence, without disclosing details. The firm, with 7.76 trillion yuan (US$1.1 trillion) of assets, is a unit of sovereign wealth fund China Investment Corp and owns strategic stakes in the nation's biggest lenders.
Khaleej Times
08-04-2025
- Business
- Khaleej Times
Asian markets battle to recover after tariff-fuelled collapse; China vows to 'fight to the end'
Asian markets battled on Tuesday to recover from the previous day's tariff-fuelled collapse, though US President Donald Trump's warning of more measures against China and Beijing's vow to fight "to the end" raised concerns the trade war could worsen. Equities across the world have been hammered since Trump unveiled sweeping levies against friend and foe, upending trading norms, sparking talk of a global recession and wiping trillions of company valuations. Investors fought to claw back some of those losses as they try to assess the possibility that Washington could temper some of the tariffs. Tokyo traded up more than six percent, recovering much of Monday's drop, after Japanese Prime Minister Shigeru Ishiba held talks with Trump. However, the US leader's threat to hit China with an extra 50 per cent tariffs, in response to its 34 per cent retaliation in kind, ramped up the chances of a catastrophic stand-off between the two economic superpowers. Trump said he would impose the additional levies if Beijing did not heed his warning not to push back against his barrage of tariffs. China fired back that it would "never accept" such a move and called the potential escalation "a mistake on top of a mistake". "If the US insists on going its own way, China will fight it to the end," a spokesperson for Beijing's commerce ministry said on Tuesday. In light of the turmoil gripping markets, Trump told Americans to "be strong, courageous, and patient". While uncertainty rules, investors in most markets took the opportunity to pick up some beaten-down stocks. In Tokyo, Nippon Steel piled on around 11 per cent after Trump launched a review of its proposed takeover of US Steel that was blocked by his predecessor Joe Biden. Hong Kong gained more than two per cent but was well off recouping Monday's loss of more than 13 per cent that was the biggest one-day retreat since 1997. Sydney, Seoul, Wellington and Manila also rose. Shanghai was also up Tuesday after China's central bank promised to back major state-backed fund Central Huijin Investment in a bid to maintain "the smooth operation of the capital market". The advance followed a less painful day on Wall Street, where the S&P and Dow fell but pared earlier losses, while the Nasdaq edged up. Oil prices also enjoyed some respite, gaining more than one per cent. Others however were not as fortunate. Taipei shed more than four per cent to extend the previous day's record loss of 9.7 per cent, while Singapore also suffered further selling. Trading in Jakarta was suspended soon after the open as it plunged more than nine per cent as investors returned from an extended holiday, while the bourse in Vietnam -- which has been hit with 46 per cent tariffs -- shed five per cent. Analysts warned that things could get worse. "If none of the announced tariffs are reversed by deal-making in the next four weeks or so, the global economy risks entering an 'oil price shock' type crisis by mid-year," said Vincenzo Vedda, global chief investment officer at DWS. Pepperstone's Chris Weston added: "Most see a low probability that China will fold on its 34 per cent tariff countermeasure, so we assume a high risk that Trump will follow through with an additional 50 per cent tariff rate." And JPMorgan Chase CEO Jamie Dimon told shareholders: "Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth." He added that "the recent tariffs will likely increase inflation". The trade war has also put the Federal Reserve in the spotlight as economists say it could send prices surging. Bank officials are now having to decide whether to cut interest rates to support the economy, or keep them elevated to keep a lid on inflation. "Because the tariffs announced thus far are higher than previously expected, we think the risk is now skewed toward more rate cuts by year-end," said Nuveen chief investment officer Saira Malik. "The debate around further cuts, however, has shifted from inflation to decelerating growth. Notably, our probability-weighted guidance has increased from a total of four Fed cuts through 2025 and 2026 to 6.6 cuts."
Reuters
08-04-2025
- Business
- Reuters
China, Hong Kong stocks rise with regional markets, Beijing support
HONG KONG, April 8 (Reuters) - China and Hong Kong stocks rose on Tuesday, steadying in the wake of stronger regional markets and government-led support after a brutal selloff triggered by concerns over trade tariffs. China's blue-chip CSI 300 Index (.CSI000300), opens new tab climbed 0.2% and the Shanghai Composite Index (.SSEC), opens new tab gained 0.3% in early trade, after both slid more than 7% on Monday. Hong Kong's Hang Seng Index (.HSI), opens new tab jumped 2% after experiencing its steepest decline since the 1997 Asian financial crisis, while the Hang Seng Tech Index added 4.5%. Beijing has publicly stepped up efforts to stabilise the market after U.S. President Donald Trump slapped a 34% tariff on China last week. China has since responded with 34% levies on U.S. imports. Sovereign fund Central Huijin Investment, dubbed the "national team", said it has bought China-listed shares via exchange-traded funds and will continue to increase holdings to "safeguard the smooth operation of the capital market." Several Chinese state holding companies have followed suit and vowed on Tuesday to increase share investment, while a slew of listed companies announced share buy-backs to support prices. Prior to Tuesday's rebound, the blue-chip CSI 300 and the Shanghai Composite Index both plummeted over 7%, while Hong Kong's Hang Seng Tech Index (.HSTECH), opens new tab dropped nearly 19% since Trump's "Liberation Day" tariffs threatened to disrupt global trade and potentially trigger a global recession. Sentiment largely stabilised in Asia trading on Tuesday with major markets starting to claw back recent heavy losses. Japan's Nikkei 225 index (.N225), opens new tab rose 6% in a broad rally, while MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab was 0.1% firmer.
South China Morning Post
08-04-2025
- Business
- South China Morning Post
Hong Kong's stock index rises 1.7% at the open as China's state funds step in to prop up market
The stock indexes of Hong Kong, Shanghai and Shenzhen rose when trading commenced on Tuesday, after several Chinese state funds stepped in to prop up the market, amid signs that the panicked sell-off in global bourses was tapering off. Advertisement The Hang Seng Index opened 1.7 per cent higher at 20,157.52, advancing for the first time in four days, after a rout that wiped out at least HK$194 billion (US$25 billion) in market value. The CSI 300 index, which tracks the 300 largest stocks in Shanghai and Shenzhen, opened 0.2 per cent higher at 3,597.99. Elsewhere in Asia, Japan's Nikkei 225 index rose 1.9 per cent at the open, while the ASX 200 index in Australia opened flat. Stock indexes also rose in Seoul and Wellington, while trading was mixed in Kuala Lumpur and Singapore. Central Huijin Investment, a unit of China's US$1.2 trillion sovereign wealth fund, bought exchange-traded funds (ETFs) on Monday, intervening in the nation's stock market that is reeling from the mayhem inflicted by reciprocal tariffs from the US. Central Huijin acquired ETFs and will make more such investments in the future to 'resolutely' maintain the stability of the capital market, the company said yesterday in a statement on its website, without specifying what the ETFs or the investment were. Advertisement The company was 'firmly' positive on the outlook of China's capital markets and fully acknowledges the allocation values of A shares, or the yuan-denominated stocks trading on China's onshore exchanges, the statement said.
