ASIAN markets were mixed on Wednesday after President Donald Trump broadened his tariff threats, while traders were also assessing the geopolitical outlook after the first high-level official US-Russia talks since the invasion of Ukraine.
Regional investors struggled to pick up the baton after a record close on Wall Street, with the rally in Hong Kong-listed tech stocks suffering a setback following disappointing earnings from Chinese internet giant Baidu.
The US president warned on Tuesday that he would impose tariffs “in the neighbourhood of 25 per cent” on auto imports and a similar amount or higher on semiconductors and pharmaceuticals.
The comments widened his trade war, having earlier pledged 25 per cent levies on steel and aluminium, and while observers say the threats are likely being used as a negotiating tool, they revived worries about the impact on the global economy.
Stefan Angrick and Dave Chia at Moody’s Analytics said: “We expect political and economic realities will force the Trump administration to scale back these measures by this time next year.
“While broad-based tariff increases will be reversed, restrictions on Chinese goods will stay in place, as seen in the first trade war.
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“That said, the situation is fast-moving, and the coming weeks will undoubtedly bring new policy announcements and updates to our forecast.”
On Tuesday, China – a key target in Trump’s tariffs policy – told the World Trade Organization that he risked triggering inflation, market distortions and even a global recession.
“The world faces a series of tariff shocks,” Li Chenggang, China’s ambassador to the WTO, said, adding that US unilateralism threatened to upend the rules-based multilateral trading system.
While all three main indexes on Wall Street rose, with the S&P 500 closing at a record high, Asia struggled to maintain momentum.
Singapore, Shanghai, Seoul, Wellington and Manila rose.
But Tokyo fell as auto firms and semiconductor makers were hit by Trump’s tariff announcement, and Taipei was weighed by a sell-off in chip giant TSMC.
There were also losses in Sydney, Taipei and Jakarta.
Hong Kong was dragged down by tech firms after Baidu’s fourth-quarter earnings saw a fall in revenue and a warning of near-term pressures.
The sector has helped the Hang Seng Index surge around 15 per cent since the turn of the year, helped by the emergence of Chinese startup DeepSeek’s new chatbot that has upended the AI universe.
Xi Jinping’s meeting with China’s top business leaders this week – including Alibaba co-founder Jack Ma – added to the optimism amid hopes of a fresh boost for the private sector.
Traders are keeping tabs on talks between Washington and Moscow after their top diplomats met in Saudi Arabia.
The discussions, which excluded Europe and Kyiv, ended with Moscow and Washington agreeing to appoint teams to negotiate an end to the three-year-long Ukraine war. AFP
