(Bloomberg) — Asian stocks fell Tuesday, tracking US shares lower as President Donald Trump’s pledge to impose tariffs on trading partners raised the spectre of a trade war hitting global economic growth.
Tokyo and Sydney shares were down, with futures showing equity benchmarks in Hong Kong to open lower Tuesday. The S&P 500 declined almost 2% as the US president said Mexico and Canada couldn’t negotiate a reprieve from tariffs set to take effect Tuesday and signed an order doubling a levy on China to 20%. The Canadian dollar and Mexican peso dropped. Bonds rose amid concern on intensifying tariff war will hit global growth.
Investors are increasingly becoming wary about rising geopolitical tensions and the prospect of tit-for-tat tariffs worsening the global trade spat. Communist Party-backed news outlet Global Times reported Monday that Beijing is considering retaliatory measures on US agriculture and food products in response to the president’s latest actions.
“Market anxiety levels have been dialled up, and we see traders having to react aggressively and dynamically,” wrote Chris Weston, head of research at Pepperstone Group Ltd., in a note. “Either way, volatility in markets is on the rise and we need to be prepared for headlines to break at any moment.”
The S&P 500 fell 1.8%. The Nasdaq 100 slid 2.2%. The Dow Jones Industrial Average dropped 1.5%. A gauge of the Magnificent Seven megacaps sank 3.1%. A UBS basket of of US stocks negatively impacted by tariffs sank 2.9%.
The yield on 10-year Treasuries fell five basis points to 4.16% on Monday. The Bloomberg Dollar Spot Index was steady. Bitcoin ticked up slightly after sinking more than 9% the day before.
The new tariffs against China come as President Xi Jinping and thousands of delegates including ministry chiefs and provincial leaders gather in Beijing for the annual National People’s Congress, which starts from Wednesday.
Policymakers are expected to push China’s official budget deficit target to the highest in over three decades, pumping trillions of yuan into a system battling deflation, a property crash and now a trade war with the US.
The outlook for emerging Asian currencies is worsening again after the new tariffs on China. Regional currencies have tumbled over the past week, with the Thai baht and South Korean won both sliding about 2%.
Trump also said Monday that the US would impose tariffs on “external” agricultural products starting on April 2, adding another layer of threats to impose trade barriers on imported goods. He didn’t detail which products would be affected, or if there would be any exceptions.
That drove prices of Chinese soymeal — used in food and animal feed — to close 2.6% higher on Monday, the most in more than three weeks. A disruption to US soybean shipments could tighten the market further.
Taiwan Semiconductor Manufacturing Co., the world’s top producer of AI chips, said it plans to invest an additional $100 billion in US plants that will boost its chip output on American soil and support Trump’s goal of increasing domestic manufacturing.
In economic data, Monday’s manufacturing data was the latest in a slew of disappointing US economic reports in the last two weeks, showing weaker housing, rising unemployment claims and a drop in personal spending. Crypto tumbled a day after the industry surged as Trump stepped up calls for a digital-asset stockpile.
In commodities, oil sank as OPEC+ said it will proceed with plans to revive halted production.
Key events this week:
- Eurozone unemployment, Tuesday
- President Donald Trump’s speech to a joint session of Congress, Tuesday
- China Caixin services PMI, Wednesday
- Eurozone HCOB services PMI, PPI, Wednesday
- US ADP employment, ISM services index, factory orders, Wednesday
- Fed’s Beige Book, Wednesday
- Eurozone retail sales, ECB rate decision, Thursday
- US trade, initial jobless claims, wholesale inventories, Thursday
- US Treasury Secretary Scott Bessent speaks, Thursday
- Fed’s Christopher Waller and Raphael Bostic speak, Thursday
- Eurozone GDP, Friday
- US jobs report, Friday
- Fed Chair Jerome Powell gives keynote speech at an event in New York hosted by University of Chicago Booth School of Business, Friday
- Fed’s John Williams, Michelle Bowman and Adriana Kugler speak, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.2% as of 8:49 a.m. Tokyo time
- Hang Seng futures fell 0.2%
- Australia’s S&P/ASX 200 fell 1.1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0483
- The Japanese yen rose 0.2% to 149.20 per dollar
- The offshore yuan was little changed at 7.3042 per dollar
Cryptocurrencies
- Bitcoin rose 1.3% to $86,443.7
- Ether rose 2.2% to $2,156.98
Bonds
- The yield on 10-year Treasuries declined five basis points to 4.16%
- Japan’s 10-year yield advanced four basis points to 1.410%
- Australia’s 10-year yield declined seven basis points to 4.26%
Commodities
- West Texas Intermediate crude fell 0.1% to $68.29 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jason Scott.
©2025 Bloomberg L.P.
