Global stock markets tumble as Donald Trump’s tariffs loom

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Global markets fell on Monday over fears of an intensified trade war ahead of Donald Trump’s expected unveiling of a swath of extra tariffs.

Japanese, Taiwanese, South Korean and Hong Kong stocks fell sharply alongside US futures, accelerating a sell-off that began last week, after Trump said reciprocal US tariffs he expected to announce on April 2 would apply globally.

“You’d start with all countries, so let’s see what happens,” Trump told reporters on Air Force One on Sunday in the US. Last week he hinted at concessions for some countries.

The president singled out Asia for its trade practices. “Take a look at trade with Asia. I wouldn’t say anybody has treated us fairly,” he said.

Japan’s benchmark Topix dropped 3.3 per cent and the exporter-oriented Nikkei 225 slid 3.9 per cent. In Taiwan, the Taiex shed 4.2 per cent, while South Korea’s Kospi fell 3 per cent. Hong Kong’s Hang Seng retreated 1.6 per cent.

Futures markets pointed to continued falls in the US and Europe, with contracts tracking the Nasdaq 100 down 1.1 per cent and the S&P 500 down 0.6 per cent.

In Europe, futures for the Stoxx 600 and FTSE 100 were also down 0.6 per cent.

Chipmakers from the region were among the biggest losers, with Taiwan Semiconductor Manufacturing Company and Samsung Electronics dropping 4.4 per cent and 3.5 per cent respectively. Japan’s Disco, a maker of tools for chip production, declined more than 8 per cent.

In Hong Kong, Tencent and Alibaba fell 1.5 per cent and 2 per cent respectively.

Gold hit a record $3,098 a troy ounce, while US Treasury yields declined in a sign that investors were piling into safe assets. The 10-year US Treasury yield fell 0.06 percentage points to 4.2 per cent.

“Many investors are [waiting] for actual tariffs to be announced, unwinding their positions and realising gains,” said Wei Li, head of multi-asset investments for BNP Paribas in China. “This tariff announcement . . . has affected the whole market sentiment.”

Trump has billed April 2 as “liberation day” for the US economy, but his plans to levy so-called reciprocal tariffs on countries that he judges have unfair trade relationships with the US have alarmed investors.

In currency markets, the yen strengthened 0.6 per cent against the dollar to ¥149, while South Korea’s won was flat. The dollar edged down 0.2 per cent against a basket of key trading partners’ currencies.

The movements in Asia came after falls on Friday in the US, where the S&P 500 dropped 2 per cent. The tech-focused Nasdaq Composite slid 2.7 per cent as gloomy data on the economy and consumer sentiment raised fears about stagflation.