Asia-Pacific stocks stumbled on Tuesday, tracking Wall Street lower after US President Donald Trump reimposed tariffs on some metal imports from Brazil and Argentina and as his administration eyed duties on EU products.
Australia’s S&P/ASX 200 fell 2 per cent in morning trading as miners struggled following the comments out of Washington that reignited fears over the prospects for global trade. Hong Kong’s Hang Seng slid 1.4 per cent and the CSI 300 of Shanghai- and Shenzhen-listed stocks fell 0.6 per cent. Tokyo’s Topix lost 1 per cent.
Mr Trump said in a tweet on Monday that he will reimpose tariffs on imports of steel and aluminium from Brazil and Argentina as he accused the countries of devaluing their currencies.
The US also proposed 100 per cent tariffs on up to $2.4bn of French goods in response to the country’s new digital services tax. The US trade representative’s office said it was considering broadening a range of tariffs on EU goods over subsidies to airline maker Airbus.
Separately, Beijing retaliated against Mr Trump’s decision to sign legislation supporting protesters in Hong Kong by barring US navy ships from visiting the territory and slapping sanctions on four US-based non-governmental organisations. Mr Trump admitted on Monday that signing the legislation did not increase the chances of agreeing a so-called ‘phase one’ trade deal.
“The US’s show of force on tariffs is as much a message to China as it is to the countries which are affected. It says: ‘tariffs are still a weapon we can use if you don’t sign a deal’,” said Robert Carnell, an economist with ING.
The dollar index, a measure of the greenback against a basket of peers, was hovering at its lowest level in almost two weeks. The yield on the 10-year US Treasury, which moves inverse to price, was flat at 1.819 per cent.