Asian Markets Fall Amid Trump's Tariff Order

Investors fear a global trade war.

Asian stock markets fell sharply on February 3 after U.S. President Donald Trump imposed tariffs on Canada, Mexico and China. Investors took this as a signal for a new round of the global trade war, Bloomberg writes.

The MSCI Asia Pacific Asian stock index fell by 2.43% to 179.63 points at 11:50 Moscow time, having fallen by 2.98% at its minimum. The Nikkei 225 Japanese stock index lost 2.66% on February 3 and closed at 38,520.09 points.

The Hang Seng China Enterprises Index lost 2.53% to 7,195.39 points at its minimum during the first trading session after the Chinese New Year celebration. However, by the end of the session, the benchmark had recovered to 7,384.11 points, adding 0.03%.

Bloomberg notes that some investors expected that the introduction of tariffs could be delayed or canceled in the course of further negotiations. Now it has become clear that corporate earnings will inevitably suffer, because Asian countries are largely dependent on exports to the United States.

In particular, the imposed duties will affect the business of Japan's largest automakers, which supply cars produced or assembled in Mexico to North America. Shares of Toyota Motor fell by 5%, Honda Motor by 7.2% and Nissan Motor by 5.63%, according to data from the closing of trading on the Tokyo Stock Exchange. Shares of South Korean automaker Kia, which has a plant in Mexico, lost 5.78% on the Seoul Stock Exchange.

Shares of Chinese electric vehicle makers Li Auto and XPeng, which are seeking to expand their presence in the U.S. market, were down 5.66% and 0.76%, respectively, in Hong Kong as of 10:56 a.m. Moscow time.

Exporters of clothing, accessories, home goods and electronics also saw their shares fall. Sportswear maker Li Ning and home appliance maker Haier Smart Home are down 2.87% and 2.33%, respectively.

Japanese semiconductor equipment makers, which typically get most of their revenue from China, have also suffered.

Meanwhile, Bloomberg analysts say Asian refiners could benefit from the tariffs, as Trump’s trade duties on Canadian and Mexican crude imports could give Asian refiners an advantage over their U.S. peers.

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