Asian Markets Tumble As US Tariffs on Chinese Imports Set to Take Effect

Asian markets declined sharply as the latest US tariffs, including a 104% duty on Chinese imports, were set to begin. 

Japan’s Nikkei 225 index initially fell nearly 4%, with losses also seen across markets in South Korea, New Zealand, and Australia. 

The Nikkei dropped more than 3.9% before easing slightly, and was down 3.5% at 31,847.40 about an hour after the opening bell. 

South Korea’s Kospi fell 1% to 2,315.27. 

Australia’s S&P/ASX 200 shed 2% to 7,359.30. 

Stocks in New Zealand also traded lower. 

The market downturn in Asia followed another steep decline on Wall Street on Tuesday. 

The S&P 500 dropped 1.6%, erasing an earlier gain of 4.1%, bringing it nearly 19% below its all-time high from February. 

The Dow Jones Industrial Average declined 0.8%, while the Nasdaq Composite lost 2.1%. 

Investor sentiment remains fragile amid uncertainty over President Donald Trump’s next move in the escalating trade war. 

The sharply higher tariffs were scheduled to take effect at 12:01 a.m. Eastern time, and markets remain unsure about the future direction of US trade policy. 

Tuesday’s losses came after global rallies earlier in the day, with Tokyo’s benchmark up 6%, Paris gaining 2.5%, and Shanghai rising 1.6%. 

Analysts continue to warn of increased market volatility as uncertainty grows over the potential duration and economic impact of the tariffs. 

Higher import duties are expected to raise prices for American consumers and could slow the US economy. 

Economists say a prolonged trade war could lead to a recession, while a quick resolution through negotiations might avoid the worst-case scenario. 

Hopes for a diplomatic breakthrough helped spark a morning rally on Wall Street before markets reversed course. 

President Trump said Tuesday that discussions with South Korea’s acting president had helped “reach the confines and probability of a great DEAL for both countries.” 

Earlier that day, Japanese shares led global gains after Prime Minister Shigeru Ishiba appointed his chief trade negotiator to begin talks with the United States following a conversation with Trump. 

Meanwhile, Beijing vowed to retaliate if tariffs are raised further, promising to “fight to the end.” 

White House press secretary Karoline Leavitt confirmed Tuesday that Trump’s latest tariff threats would become official after midnight, imposing a 104% tax on Chinese imports. 

Trump has ruled out exemptions or exclusions, according to top US trade negotiator Jamieson Greer. 

Greer told a Senate committee that about 50 countries had already reached out to discuss potential solutions. 

“If you have a better idea to achieve reciprocity and to get our trade deficit down, we want to talk with you, we want to negotiate with you,” he said. 

Trump’s trade war targets the global economic structure shaped by decades of globalization, which has lowered consumer prices but also contributed to the offshoring of manufacturing jobs. 

The US president has repeatedly said he aims to reduce trade deficits—the gap between what the United States imports and what it exports.