Asian stock markets declined on March 5, tracking a sell-off in US markets after President Donald Trump announced new tariffs on trading partners, increasing concerns about a global trade war.
Stock markets in Tokyo and Sydney opened lower, while Hong Kong futures also pointed to losses. In the US, the S&P 500 fell 1.8%, the Nasdaq 100 dropped 2.2%, and the Dow Jones Industrial Average declined 1.5%. A group of large technology stocks called the Magnificent Seven sank 3.1%, while a UBS basket of stocks impacted by tariffs fell 2.9%.
Impact of US Tariffs on Global Markets
Trump added that Mexico and Canada would not be excluded from tariffs that take effect on March 5, and also doubled tariffs on Chinese goods to 20%. The Canadian dollar and Mexican peso dropped following his remarks, while US Treasury bonds gained as investors worried about the impact on global growth.
China’s official media reported that Beijing will levy retaliatory tariffs on US agricultural and food products. This pushed Chinese soymeal prices 2.6% higher, the most in over three weeks.
The new tariffs against China are on the eve of the National People’s Congress in Beijing, where Chinese policymakers are set to increase budget deficit targets to prop up the economy. As trade disruption concerns intensify, Asian currencies are weakening once more, with the Thai baht and South Korean won down about 2% over the past week.
Market experts foresee the current volatility to continue as trade war tensions escalate. US 10-year Treasury yields fell by five basis points to 4.16%, and Bitcoin posted modest gains after falling by 9% the previous day.
TSMC Expands US Investment
Amid concerns about US-China trade relations, Taiwan Semiconductor Manufacturing Co. (TSMC) announced that it would invest an additional $100 billion in US chip plants. The investment aligns with Trump’s goal to boost US-based manufacturing of AI chips and reduce the reliance on foreign suppliers.
Weak US Economic Data Adds to Concerns
The latest US economic data showed weaker manufacturing, higher unemployment claims, and a decline in personal spending. These indicators add to investor concerns that the US economy may slow down further.
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Source: Moneycontrol.
News Desk
