Rising US Tariff Saga Hits Asia, European Stocks Hard

Bank of Japan calls meeting on global economy and markets Top officials from the Bank of Japan, the Finance Ministry and the Financial Services Agency met Wednesday to discuss the nation’s response to what they said were the recent shifts in the global economy and markets

Washington: Asian and European shares slid on Wednesday, with Japan’s Nikkei-225 dipping more than 5 per cent, as the latest set of US tariffs including a massive 104 per cent levy on Chinese imports took effect. The Nikkei 225 lost 3.9 per cent to 31,714.03. In Hong Kong, the Hang Seng lost 0.4 per cent to 20,041.03, while the Shanghai Composite index reversed early losses, gaining 0.9 per cent to 3,173.56. Taiwan led losses in Asia, as its Taiex plunged 5.8 per cent. China said it will take “resolute measures” to defend its trading rights, but gave no details on how it will respond to US moves. Germany’s DAX lost 2.1 per cent to 19,857.36. In Paris, the CAC 40 declined 2.1 per cent to 6,949.92. Britain’s FTSE 100 gave up 2 per cent to 7,753.42.

The future for the S&P 500 lost 0.7 per cent while that for the Dow Jones Industrial Average was down 0.5 per cent. On Tuesday, the S&P 500 dropped 1.6 per cent after wiping out an early gain of 4.1 per cent. That took it nearly 19 per cent below its record set in February. The Dow Jones Industrial Average dropped 0.8 per cent, while the Nasdaq composite lost 2.1 per cent. Uncertainty is still high about what President Donald Trump will do with his trade war. The sharply higher tariffs kicked in as of midnight Eastern time in the US. More swings up and down for financial markets are excepted given the uncertainty over how long Trump will keep the stiff tariffs on imports, which will raise prices for US shoppers and slow the economy. If they last a long time, economists and investors expect them to cause a recession. If Trump lowers them through negotiations relatively quickly, the worst-case scenario might be avoided.

China says it will take “resolute measures” to defend its trading rights China said it will take “resolute measures” to defend its trading rights, but gave no details on how it will respond to US moves that have pushed tariffs on Chinese goods to an unprecedented 104 per cent.

Foreign Ministry spokesperson Lin Jiang said at a daily briefing Wednesday that China would “by no means” accept the US tariff hikes and extreme pressure exerted on China.