Asian stocks slide as investors brace for more Trump tariffs

Photo: AP

Asian stock markets mostly dropped on Friday as investors became worried about the new tariffs announced by U.S. President Donald Trump. His plan to add a 25% tax on auto imports caused a wave of selling, especially in the automobile sector.

Japan and South Korea Hit Hard

In Japan, the Nikkei 225 index fell by 2.2% to 36,952.34. Auto stocks were heavily sold, with Toyota Motor Corp. losing 2.7% and Honda Motor Co. falling 2.3%.

A report also revealed that Tokyo’s inflation rate had increased to 2.9% this month. This led to expectations that the Bank of Japan might raise its key interest rate in May.

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In South Korea, the Kospi index dropped 1.8% to 2,559.16. Leading carmakers also took a hit, with Hyundai Motor Co. down by 3.6% and Kia Corp. slipping 3.1%.

Losses in Hong Kong and China

Hong Kong’s Hang Seng index turned negative, falling by 0.9% to 23,368.67. Meanwhile, China’s Shanghai Composite index slipped 0.7% to 3,349.68.

Mixed Performance in Other Asian Markets

In Australia, the S&P/ASX200 index managed to rise slightly by 0.1% to 7,978.30.
However, Taiwan’s Taiex tumbled 1.9% and Bangkok’s SET index dropped 0.4%.

Wall Street Also Slips

On Thursday, the U.S. stock market ended with small losses. The S&P 500 fell 0.3% to 5,693.31, while the Dow Jones Industrial Average slipped 0.4% to 42,299.70. The Nasdaq composite declined 0.5% to 17,804.03.

Automakers were hit hard by Trump’s tariff news. General Motors sank 7.4%, one of the biggest losses of the day. Ford Motor dropped 3.9%.

Even U.S.-based car companies felt the impact because many of their supply chains stretch across North America and beyond. Trump said he wants more manufacturing to take place in the U.S., but it is still unclear how the tariffs will affect auto parts made in Mexico and Canada under their free-trade agreement. Tracking parts may become complicated.

Electric Vehicle Makers Gain

Some U.S. electric vehicle companies performed better. Since most of their production is based in the U.S., they will face less pressure from the tariffs.
Rivian shares surged 7.6%, while Tesla, led by Elon Musk, rose 0.4% after giving up earlier, larger gains.

Auto Parts Retailers Benefit

Companies that sell auto parts saw their shares increase, as people may choose to repair their old cars rather than buy new ones.
AutoZone shares climbed 4%, O’Reilly Automotive gained 3.1%, and CarMax, which sells used cars, rose 2.5%.

More Tariffs Expected by April 2

Global markets are likely to remain shaky as the April 2 deadline approaches. Trump has named this day "Liberation Day", when he plans to introduce more tariffs on trade partners. He said these tariffs will be "reciprocal," matching the taxes other countries place on U.S. goods.
Stephen Innes, an expert at SPI Asset Management, said traders are wondering what surprises Trump might reveal with the next round of tariffs.

U.S. Economy Shows Stability

Despite the market worries, the U.S. economy remained steady.
On Thursday, a report showed that fewer workers applied for unemployment benefits than expected, which suggests the job market is stabilizing.
Another report revealed that the U.S. economy grew slightly more than earlier estimated in the final three months of last year.

Oil and Currency Update

In oil trading on Friday:

• U.S. benchmark crude oil slipped by 3 cents to $69.89 per barrel.

• Brent crude oil, the international standard, dipped 5 cents to $73.29 per barrel.

In currency trading:

• The U.S. dollar dropped to 150.89 Japanese yen, down from 151.05 yen.

• The euro edged down slightly to $1.0786 from $1.0804.