Stocks fall after Donald Trump confirms tariffs will continue to move forward
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Global stocks fell on Tuesday after U.S. President Donald Trump confirmed that tariffs on Canada and Mexico would take effect as Chinese goods tariffs increased.
The CSI 300 benchmark in mainland China fell 0.4% in morning trading, while Hong Kong’s Han-Hong Kong index fell 0.7%. Japan’s heavy Nikkei 225 fell 1.8%, while Australia’s S&P/ASX 200 returned 0.8%.
Overnight on Wall Street, the S&P 500 fell nearly 2%, while the Nasdaq Comprehensive Index fell 2.6%, after Trump said tariffs on Canada and Mexico were 25%, which will take effect on Tuesday.
The White House confirmed that the president also signed an executive order requiring 20% of China’s import taxes starting Tuesday.
“Ace… Jason Lui, head of Asia Pacific Stock and Derivatives Strategy at BNP Paribas, said the last-minute hope of avoiding tariffs has been reduced. “Tariffs [on China] Faster than we expected, but faster. ”
A basket of currencies on Tuesday, including the euro, the yen and the pound, fell 0.3% after falling 0.8% the day before.
The People’s Bank of China has kept the stable midpoint of the RMB at 7 yuan (about the situation since the beginning of the year), indicating that China is seeking to defend its exchange rate.
“The uncertainty of tariffs and policy is undoubtedly limiting the dollar,” said Mitul Kotecha, head of emerging market macro and forex strategy at Barclays, who added that weak U.S. economic data has led to fears of a slowdown in the world’s largest economy.
“I think the usual message is that there are some beatings in the risky assets,” he said.
Analysts pointed out that Chinese stocks remain relatively strong after DeepSeek launched its budget AI model in January due to optimism about the country’s artificial intelligence capabilities.
The National People’s Congress held this week, China’s rubber stamp parliament is also expected to generate further policies to stimulate the domestic economy.
“It’s interesting that the technological bullish we’ve seen in recent weeks continues to continue in Chinese stocks,” Kotecha said.
Regional defense shares are another highlight in the expectation that the administration must increase military spending and add burden to their security burden as Trump demonstrates a pullback promised by the U.S.
On Monday, Washington suspended military aid to Ukraine.
Japanese shipyard Mitsubishi Heavy Industries rose about 4% on Tuesday, while South Korea’s Hanwha aerospace volume rose 15%.
The suspension aerospace and defense index of China’s defense stock (China’s defense stock) rose by 1.9%.
“The rising geopolitical uncertainty suggests that countries will have to build defense capabilities around the world,” Lui said.
