Asia-Pacific markets fall on fresh US-China tensions around tariffs, rare-earths export controls
[SINGAPORE] Asia-Pacific markets reacted negatively as trading opened on Monday (Oct 13) following the latest salvo in the trade war between the US and China.
The Kospi index dropped 1.5 per cent as at 9.35 am in Korea, while Australia’s ASX 200 dipped 0.5 per cent as at 11.35 am Sydney time. Markets in Japan were closed due to a holiday.
US President Donald Trump on Saturday (Oct 11) said that he would impose a fresh 100 per cent tariff on China, on top of existing levies, and export controls on “any and all critical software” starting from Nov 1. This came after a Friday (Oct 10) threat of trade action against China in response to “hostile” export controls Beijing placed on rare-earth minerals.
Beijing on Sunday (Oct 12) said it will retaliate if Trump does not back down, according to state news agency Xinhua.
Trump’s planned tariffs will see import taxes on Chinese goods rise from 30 to 130 per cent, slightly under the 145 per cent level imposed earlier this year that was later reduced.
Trump later posted a statement on his social media platform Truth Social that suggested Chinese President Xi Jinping would back down, suggesting that that a full trade war would hurt China.
Citi analysts on Monday suggested that stock volatility should be lower than during the US reciprocal tariffs in the second quarter of 2025 “because the new tariff only applies to exporters directly exporting to the US from China”.
However, they said they were “unsure” on how long such volatility could last.
