ASIAN markets sank Tuesday as fears of US President Donald Trump’s trade war returning to the fore and he called for fresh curbs on Chinese investments in strategic sectors including technology.
The losses followed a broadly negative day in New York, where mighty tech giants have hit a wall since China’s DeepSeek unveiled a chatbot that upended the AI industry and led traders to reassess their recent vast investments.
They also come ahead of the release of earnings from market darling Nvidia, which will be closely watched for its views on the outlook in light of the Chinese startup’s arrival.
After a healthy run in February, markets have been put on the back foot after Trump said on Monday that he plans to proceed with tariffs on Canada and Mexico once a 30-day suspension expires next week.
Levies were announced against countries in January but the president said they would be delayed by a month to allow for negotiations. Tariffs on Chinese goods went ahead without a grace period.
The comments came after Mexican President Claudia Sheinbaum said earlier in the day that talks would continue this week to avoid the sweeping levies.
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Canada’s Foreign Minister Melanie Joly meanwhile warned “the threat of tariffs is a real one, and may continue for a while”.
Trump’s announcement came after he signed a memo at the weekend calling for curbs on Chinese investments in industries including technology and critical infrastructure, and an expanded role for a key panel that looks into foreign investments in the United States.
The move is aimed at promoting foreign investment in the United States, while protecting national security interests “particularly from threats posed by foreign adversaries” like China, the White House said.
The memo singled out China for “increasingly exploiting United States capital to develop and modernise its military, intelligence, and other security apparatuses”.
China said the “US approach unduly broadens the concept of national security, and is discriminatory”.
The developments fanned tensions between the world’s top economic superpowers and added to concerns about another possible debilitating trade war amid growing uncertainty about the global outlook.
Hong Kong, where tech titans including Alibaba and Tencent have led the market to a three-year high, was among the biggest losers.
The Hang Seng Index dropped more than one per cent, with Alibaba and ecommerce rival JD.com off more than four per cent and Tencent off more than two per cent.
Alibaba’s New York-listed stock sank more than 10 per cent on Monday.
Shanghai, Tokyo, Sydney, Wellington, Taipei, Manila and Jakarta were also well in the red.
Seoul retreated as the South Korean central bank cut its economic growth outlook and lowered interest rates amid fears over the impact of Trump’s tariff drive and the fallout from President Yoon Suk Yeol’s brief declaration of martial law last year. AFP
