Asian market slide on trade tensions

Image Credits: UnsplashImage Credits: Unsplash
  • Asian markets tumble as U.S. escalates trade war with new 145% tariffs on Chinese imports.
  • Japan’s Nikkei 225 drops 5.6%, while South Korea, Australia, and China also see significant losses.
  • U.S. considers new tech export restrictions on China; Taiwan’s Taiex rises amid potential trade redirection.

[WORLD] Asian stock markets recorded steep declines Friday as mounting tensions between the United States and China reignited fears of a prolonged trade conflict, shaking investor confidence across the region. The renewed uncertainty follows a series of aggressive policy signals from both Washington and Beijing, escalating worries about global supply chain disruptions and economic slowdown.

Tariff Threats Shake Confidence

Investors were spooked by reports that the U.S. is considering a fresh round of tariffs on Chinese goods, potentially targeting sectors like semiconductors, electric vehicles, and rare earth materials. This comes on the heels of recent comments from U.S. officials suggesting a hardline approach toward Chinese industrial policy and technology access.

President Joe Biden’s administration has not formally announced the measures, but sources familiar with the deliberations told that tariffs could reach as high as 60% on key Chinese exports. The move is widely interpreted as an effort to protect domestic industries and reduce dependency on China, especially in strategic sectors.

Major Indexes in the Red

Japan’s Nikkei 225 plunged 5.6%, its steepest daily drop since October 2022. The decline was driven by tech-heavy losses and a strengthening yen, which pressured export-oriented stocks.

  • Hong Kong’s Hang Seng Index fell 1.8%, weighed down by declines in property and tech shares.
  • China’s Shanghai Composite dipped 0.9% as investors braced for possible retaliatory measures from Beijing.
  • South Korea’s Kospi shed 1.3%, with chipmakers among the hardest hit.
  • Australia’s ASX 200 lost 1.2%, dragged lower by mining and financial stocks.

Only Taiwan’s Taiex Index bucked the regional trend, rising 1.5% amid expectations that supply chain shifts might benefit the island’s semiconductor sector.

Global Market Ripples

The selloff extended beyond Asia, with U.S. stock futures turning negative ahead of the Friday session. The S&P 500 and Nasdaq Composite had already posted losses earlier in the week, reflecting broader anxiety about tightening financial conditions and global trade instability.

“Markets are pricing in a scenario where decoupling between the U.S. and China becomes the new norm,” said Priya Nair, senior strategist at HSBC Global Markets. “That has implications not just for trade, but for capital flows, technology investment, and geopolitical risk.”

Tech Sector in the Crosshairs

Technology stocks bore the brunt of the downturn, with investors anticipating that U.S. export controls could further limit the flow of high-end semiconductors and manufacturing equipment to China. Companies like Tokyo Electron and SK Hynix saw sharp losses amid speculation that new rules may affect their Chinese clients.

Analysts also highlighted the risk of retaliatory action from China, which could include sanctions on U.S. firms operating in the country or restrictions on rare earth mineral exports, crucial for electronics and defense production.

Beijing Responds with Caution

China’s Ministry of Commerce issued a statement calling the proposed U.S. tariffs “unilateral and protectionist,” warning that Beijing “reserves the right to take necessary countermeasures.” However, Chinese officials stopped short of announcing any specific retaliation, suggesting a wait-and-see approach ahead of potential diplomatic talks.

“We urge the U.S. to return to rational dialogue and avoid actions that will harm both economies,” the ministry said.

A Volatile Road Ahead

With U.S. elections on the horizon and bipartisan support growing for a tougher China stance, investors and multinational corporations are bracing for continued volatility. Global supply chains, particularly in technology and green energy, remain highly sensitive to trade policy shifts.

Central banks in the region may also find themselves in a difficult position. While inflation is moderating in many Asian economies, the market turbulence may force policymakers to consider monetary stimulus to stabilize growth.

What to Watch Next

  • Possible formal announcement of U.S. tariffs in coming weeks.
  • China’s response, including trade or regulatory actions.
  • Market performance in the U.S. and Europe as global risk sentiment evolves.
  • Corporate earnings reports from major tech exporters in Asia.

Friday’s market turmoil reflects the growing uncertainty surrounding the future of U.S.-China trade relations. As both sides harden their positions, the likelihood of prolonged disruption looms large — not only for Asian economies but for the broader global financial system.


Finance World
Image Credits: Unsplash
FinanceJuly 8, 2025 at 11:30:00 AM

Is Hong Kong’s loan shark crackdown missing the real threat—debt collectors?

Hong Kong’s loan shark problem isn’t just about sky-high interest rates or desperate borrowers. It’s about the invisible layer that makes the entire...

Finance World
Image Credits: Unsplash
FinanceJuly 8, 2025 at 11:30:00 AM

Asian currency gains reflect trade agreement optimism

As headlines tout renewed efforts toward US–Asia trade reconciliation, Asian currencies have begun to strengthen—subtly, but meaningfully. The timing is not coincidental. It...

Finance Malaysia
Image Credits: Unsplash
FinanceJuly 7, 2025 at 12:30:00 PM

FBM KLCI dips as market consolidates ahead of tariff deadline and OPR decision

The cautious tone that gripped investors at Monday’s open reflects more than mere technical retracement. As the FBM KLCI slipped 5.45 points to...

Finance Malaysia
Image Credits: Open Privilege
FinanceJuly 7, 2025 at 11:00:00 AM

Ringgit strengthens against US dollar ahead of Bank Negara policy meeting

While the ringgit gained slightly against the US dollar this week, hovering near RM4.2060, seasoned strategists aren’t reading this as a vote of...

Finance United States
Image Credits: Unsplash
FinanceJuly 5, 2025 at 1:00:00 PM

How the US could undermine its own currency—and why it matters globally

I’m a journalist. I’m trained to remain detached, especially when writing about politics. But the past few months have tested that commitment—because when...

Finance World
Image Credits: Unsplash
FinanceJuly 4, 2025 at 8:30:00 AM

China pressed to rebuild local fiscal capacity through 30 trillion yuan debt swap plan

A proposal by Tsinghua University’s Academic Centre for Chinese Economic Practice and Thinking to issue 30 trillion yuan (US$4.2 trillion) in central treasury...

Finance United States
Image Credits: Unsplash
FinanceJuly 4, 2025 at 8:00:00 AM

S&P 500 and Nasdaq notch record closes after upbeat jobs report

Markets ended the week at record highs, powered by Nvidia’s climb toward a $4 trillion valuation and a stronger-than-expected US jobs report. But...

Finance World
Image Credits: Unsplash
FinanceJuly 3, 2025 at 10:30:00 AM

US trade pacts raise barriers to China’s offshore exports, pressuring Hong Kong stock

The Hang Seng Index dropped 1.2% on Thursday morning, erasing Wednesday’s gains, as investors responded to new trade agreements between the United States...

Finance World
Image Credits: Unsplash
FinanceJuly 2, 2025 at 1:00:00 PM

Beijing growth policy lures mainland fund flows back to Hong Kong

Hong Kong’s stock market rebounded from a one-week low on Wednesday, lifted by a wave of mainland capital flowing into selected sectors. At...

Finance World
Image Credits: Unsplash
FinanceJuly 2, 2025 at 10:30:00 AM

KPMG sees growth potential for Hong Kong banks through AI and shifting trade flows

While Hong Kong’s banks posted stable profits in 2024, the sector enters 2025 without obvious growth levers. Interest margins have plateaued. Loan demand...

Finance United States
Image Credits: Unsplash
FinanceJuly 1, 2025 at 10:00:00 AM

Senate moves to extend Trump’s tax cuts

On paper, the Senate’s push to extend Trump’s tax cuts feels like a 2017 flashback. The corporate rate stays at 21%. Small business...

Tax United States
Image Credits: Unsplash
TaxJune 27, 2025 at 5:30:00 PM

Republican megabill sharpens fiscal penalties for immigrant families

The Republican-backed immigration and tax legislation now moving through Congress is more than a budgetary maneuver. While framed as part of a broader...

Load More