Asia-Pacific Market Downturn as Trump Confirms Next Week's Tariff Implementation

Friday saw declines in Asia-Pacific markets as U.S. President Donald Trump confirmed the imposition of tariffs on goods from Mexico and Canada, which would take effect the following week.

 

In Australia, the S&P/ASX 200 index fell by 1.16%, concluding the day at 8,172.4.

 

The Nikkei 225 in Japan dropped by 2.88% to 37,155.5, while the Topix decreased by 1.98% to 2,682.09. South Korea's Kospi saw a reduction of 3.39% to 2,532.78, and the Kosdaq, focusing on smaller firms, declined by 3.49% to conclude at 743.96.

 

The Hang Seng Index in Hong Kong decreased by 3.55%, and China’s CSI 300 index fell by 1.97%, closing at 3,890.05.

 

Stocks in India also slipped, with the Nifty 50 index down by 0.99%.

 

The value of Bitcoin declined by 1.79% to $82,811.12, reflecting nearly a 25% drop since its record high in January.

 

On Thursday, Trump announced the impending enforcement of 25% tariffs on Canada and Mexico on March 4, following a month-long deferment. He noted that these nations had not sufficiently reduced drug trafficking across their borders.

 

Moreover, Trump indicated that China would also face an additional 10% U.S. tariff on products starting the same day, on top of the existing 10% tariffs.

 

In the U.S. overnight, the three major stock indexes closed in negative territory. The S&P 500 ended the day with a 1.59% decline at 5,861.57. This broad market index recorded losses for both the week and the month. The Nasdaq Composite declined by 2.78%, finishing at 18,544.42, impacted by Nvidia’s 8.5% drop.

 

The Dow Jones Industrial Average decreased by 193.62 points, equating to a drop of 0.45%, closing at 43,239.50.

 

Bitcoin's downturn intensified on Friday, marking its lowest level in over three months, erasing gains seen after Donald Trump’s presidential election win.

 

Trading midday in Asia had Bitcoin valued at approximately $79,800, down by 5.25% for the day and approximately 25% from its peak in mid-December.

 

Bitcoin saw a price spike post Trump's November victory where he positioned himself as friendly to cryptocurrency during his campaign.

 

Asian currencies weakened as the U.S. dollar strengthened following President Trump’s confirmation about upcoming tariffs on imports from Mexico and Canada.

 

The dollar index — appraises the U.S. dollar’s strength against major international currencies — climbed 0.12% to 107.36 amid investors seeking more secure options due to tariff-related uncertainties.

 

Against the dollar, the Indonesian rupiah declined by 0.78%, hitting its weakest point since April 2020.

 

Following Nvidia's removal from the $3 trillion market cap status, Asian semiconductor shares experienced reductions.

 

Advantest, a semiconductor testing equipment supplier, dropped nearly 9%, and Tokyo Electron shares fell by 5.1%. Renesas Electronics and Lasertec recorded downturns of 4.43% and 7.19%, respectively.

 

Taiwan Semiconductor Manufacturing Company saw a decrease of 1.89%.

 

Japan observed a robust 3.9% increase in retail sales year-on-year in January, marking the fastest growth rate in almost a year. This surpassed the revised 3.5% increase in December but slightly missed economists’ expectations of 4% as surveyed by Reuters.

 

Tokyo posted a February headline inflation rate of 2.9% year-on-year, down from January’s 3.4%.

 

Core inflation, which excludes fresh food prices, was at 2.2%, slightly beneath the 2.3% forecasted by Reuters. Tokyo’s inflation trends are often seen as indicators of broader national patterns.

 

President Donald Trump communicated via Truth Social that the postponed 25% tariffs on imports from Canada and Mexico are slated to start on March 4, along with an additional 10% tariff on Chinese goods.

 

Trump stated in his post that the tariff implementations are partly due to fentanyl entering the U.S. from these international borders.