Asian shares fall amid growing fears over trade war escalation
Shares drop on deepening concerns about trade war
Asian shares took a significant hit on Friday as mounting concerns over President Donald Trump’s trade war pulled the brakes on global equities.
Markets had initially surged in response to Trump’s temporary halt on tariff hikes, but the optimism quickly faded. Japan’s Nikkei 225 index plummeted by as much as 5.6%, before stabilizing at a 4.2% loss by mid-morning in Tokyo, reports Associated Press.
Investors rushed to the safe haven of the yen, which surged against the U.S. dollar, reaching 143.64 yen—a sharp decline from the previous day's 146 yen. This currency volatility highlighted growing investor fears about the future trajectory of U.S. trade policies.
South Korea's Kospi also fell by 1.3% to 2,413.16, while in Australia, the S&P/ASX 200 shed 1.2%, closing at 7,619.70. On the Chinese mainland, Hong Kong’s Hang Seng index edged down by 0.4% to 20,606.04, while Shanghai’s lost 0.2%, ending at 3,218.94. Taiwan’s Taiex bucked the trend, gaining 1.5% as investors speculated that more manufacturing orders might shift to Taiwan due to the intensifying China-U.S. trade war.
U.S. Tariff Confusion Fuels Global Instability
The global market downturn followed a sharp reversal in U.S. stock prices, with the S&P 500 dropping 3.5%, wiping out much of the 9.5% surge recorded earlier in the week after Trump’s announcement of a 90-day tariff pause.
The steep drop was fueled by confusion surrounding U.S. tariff policy. The White House clarified that U.S. tariffs on Chinese imports would increase to 145%, higher than the previously mentioned 125% figure. This caused further market panic, sending the S&P 500 into a steep decline.
China has also ramped up its countermeasures against U.S. tariffs and is seeking alliances with other countries to form a united front. Stephen Innes of SPI Asset Management described the market’s reaction to the tariff pause as a brief “sugar high,” now rapidly fading. He noted that the market was “hitting the brakes hard,” with Asia facing the brunt of the fallout.
As the trade war deepens and tariff uncertainty continues to cloud the future, global equities are struggling to maintain stability. Investors are growing increasingly wary of the impact of tariff policies on the global economy, especially in export-driven economies across Asia.
Recently we wrote, that Donald Trump announced a significant shift in U.S. trade policy by imposing a 90-day pause on reciprocal tariffs.
