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Trump Tariff Announcement Rattles Asia-Pacific Markets
Uncertainty looms as trade tensions escalate
Asia-Pacific markets presented a mixed picture Monday following **President Donald Trump**’s confirmation that previously announced tariffs would be implemented on August 1 for nations without trade agreements, heightening worries about global economic stability.
Market Reactions
Japan’s Nikkei 225 index concluded the day down by 0.56%, settling at 39,587.68, while the Topix index experienced a similar decline of 0.57%, closing at 2,811.72. Meanwhile, South Korea’s Kospi showed a slight gain, rising 0.17% to finish at 3,059.47; the Kosdaq also closed higher, up by 0.34% at 778.46.
Australia’s S&P/ASX 200 index edged down by 0.16% to end at 8,589.3. Hong Kong’s Hang Seng index declined 0.61%, and mainland China’s CSI 300 decreased 0.43%, reaching 3,965.17.
Adding to the uncertainty, **Trump** announced an additional 10% tariff on countries “aligning themselves with the anti-American policies of BRICS”
, coinciding with the BRICS summit in Rio de Janeiro, Brazil. A recent report by the World Bank indicates that increased trade restrictions could reduce global trade by as much as 9% (World Bank, 2024).
U.S. Futures Tumble
U.S. stock futures experienced a downturn following **Trump**’s confirmation that tariffs would take effect on August 1, rather than July 9. Dow Jones Industrial Average futures dropped by 146 points, or 0.32%. S&P 500 futures fell 0.39%, and Nasdaq 100 futures declined by 0.42%.
Background on Tariffs
Treasury Secretary **Scott Bessent** stated that tariffs introduced in April would be enforced starting August 1 for countries lacking an agreement with the **Trump** administration. While **Bessent** downplayed the notion of a fresh deadline, he suggested the new date could provide trading partners more time for renegotiation.
Last Friday in the U.S., major averages closed higher, with the S&P 500 and Dow Jones Industrial Average reaching new highs. The Nasdaq Composite increased by 0.33%, closing at 18,342.94, less than 2% below its all-time high.
Additionally, the Reserve Bank of Australia is commencing its two-day meeting, with expectations of a 25 basis point rate cut to 3.60%.
