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Stocks markets across Asia sank Tuesday amid mounting fears of a serious downturn in the world’s largest economy, as US President Donald Trump ramped up a tariff war against its biggest trade partners.
Trump’s refusal Sunday to rule out the possibility of a US recession has rattled Wall Street investors. Now, those fears have extended to the Asia-Pacific region.
Japan’s benchmark Nikkei 225 plunged nearly 3% in the morning session but recovered most of those losses by the end of the session to close 0.6% lower. South Korea’s KOSPI slid as much as 2.5%, and closed 1.3% lower. Taiwan’s TAIEX was at one point almost 3% down, and closed 1.7% lower. Australia’s S&P/ASX 200 finished 1% lower, while Hong Kong’s Hang Seng Index ended the trading session flat.
Regional technology shares were among the losers. Japanese tech giants, including Sony and Hitachi, plummeted more than 4.5% in the morning, and closed over 5% lower. Softbank slumped 4.3% on Tuesday.
Meanwhile, both Taiwan Semiconductor Manufacturing Company, the world’s largest contract chipmaker, finished over 3% down, and Apple supplier Foxconn closed nearly 3% down. Korea’s tech heavyweight Samsung fell over 2%, and ended flat.
Market moves in Europe were more muted.
The pan-European Stoxx Europe 600 index had ticked down 0.1% by 4.48 a.m. ET. Germany’s DAX and France’s CAC indexes were up 0.6% and 0.5% respectively, while London’s FTSE 100 was flat.
Across the pond, US stock futures pointed to a better day ahead. Dow futures were up 0.3% by 4.48 a.m. ET, while S&P 500 and NASDAQ futures had ticked up 0.4% and 0.5% respectively.
“The two main themes driving the markets are concerns over US growth and German (European) fiscal spending,” Mohit Kumar, a senior economist at Jefferies, a bank, wrote in a note Tuesday.
Initially welcomed by Wall Street, Trump’s second presidency has led to weeks of market turmoil since his inauguration. Anxiety has built up over a potentially worsening economic outlook as Trump upends trade relations by piling tariffs on Canada, Mexico and China, while slashing government spending.
In early February, he threatened to impose a 25% duty on all imports from Mexico and most goods from Canada, but he has delayed its implementation until early next month.
Last week, Trump doubled tariffs on all Chinese imports to 20%. China has responded with a fresh round of retaliatory tariffs, covering US agriculture imports, which took effect Monday.
The latest market rout came after Trump declined to comment on whether the US could face a recession. When asked on “Sunday Morning Futures With Maria Bartiromo” on Fox News if he was expecting a recession this year, Trump said, “I hate to predict things like that.” But he said a “period of transition” is expected.