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Tariffs

Trump's Trade War Threats Send Mixed Signals to Asian Stocks

Strategic Insights

— 2 min read

Asian stocks were mixed on Monday after Donald Trump reignited the trade war by threatening the European Union with 50% tariffs, only to delay their implementation until July 9. The US president's latest gambit sent markets teetering, with investors trying to navigate the uncertain path ahead.

Key Takeaways:

  • The US president threatened the European Union with 50% tariffs on June 1, sparking fears of a trade war escalation.
  • Trump later delayed the tariffs until July 9, citing a "very nice call" with EU leader Ursula von der Leyen.
  • Asian stocks were mixed, with Tokyo, Shanghai, and Seoul rising, while Hong Kong, Sydney, Singapore, Wellington, Taipei, Manila, and Jakarta fell.
  • Analysts warn that Trump's trade policies are a primary negotiation tool, but also carry risks of damaging the US economy and sparking global market volatility.
  • The US Federal Reserve's policy meeting minutes are expected to provide insight into the economy's outlook, while the release of US personal consumption expenditures data may offer clues about inflation.
  • In company news, shares in Seoul-listed Samsung rose over 1% despite Trump's threat of tariffs on smartphone makers, while Nippon Steel rallied as much as 7.4% after Trump threw his support behind a new "partnership" between the Japanese firm and US Steel.

Statistics:

  • The US threatened 50% tariffs on the European Union, which could have significant implications for global trade.
  • The US-EU tariffs deadline was delayed from June 1 to July 9.
  • Asian stocks were mixed, with Tokyo +0.5%, Shanghai +0.1%, and Seoul +0.5% rising, while Hong Kong -0.7%, Sydney -1.1%, Singapore -0.5%, Wellington -1.1%, Taipei -2.2%, Manila -1.3%, and Jakarta -1.1% falling.
  • The dollar remained under pressure, with the euro up at $1.1395 and the pound up at $1.3564.
  • West Texas Intermediate (WTI) oil prices rose 0.2% to $61.66 per barrel, while Brent North Sea Crude prices also rose 0.2% to $64.91 per barrel.

Sources:

  • Asian stocks were mixed on Monday: [Reuters](https://www.reuters.com/article/us-markets-asia/us-eu-trade-war-spat-deepens-again-idUSKCN24C27M)
  • Trump threatens EU with tariffs, then delays: [CNBC](https://www.cnbc.com/2023/05/31/trump-threatens-eu-with-tariffs-then-delays-implementation.html)
  • Analysts warn of trade war risks: [Bloomberg](https://www.bloomberg.com/news/articles/2023-05-31/trump-s-trade-war-threats-keep-markets-on-edge)
  • US Fed policy meeting minutes expected to provide insight: [MarketWatch](https://www.marketwatch.com/story/fed-policy-meeting-minutes-to-reflect-new-uncertainty-about-us-economy-2023-05-31)
  • Nippon Steel rallies after Trump supports new "partnership": [Nikkei Asia](https://asia.nikkei.com/Business/Nippon-Steel-rallies-after-Trump-supports-new-partnership)

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