Asian Shares Slip Amid Trump's Tariff Worries

Asian shares traded lower on Monday, February 3, 2025, as worries grew about US President Donald Trump's new tariffs on key trading partners. The Nikkei 225 fell 1.99%, while the Topix lost 1.87%. South Korea's Kospi dropped 2.52%, and the small-cap Kosdaq traded 2.79% lower. Hong Kong's Hang Seng Index fell 1.23% at the open. Chinese markets remained closed for the Lunar New Year holiday.

The US Chamber of Commerce warned that tariffs won't solve the yearslong issues at the borders and instead threaten to "upend supply chains" and raise prices for American families. Sung Won Sohn, professor of finance and economics at Loyola Marymount University and chief economist at SS Economics, told CNN on Saturday that "when you talk about a tariff, it's an economic war; and in war, everybody loses."

The tariffs, which include a 25% duty on imports from Mexico and most goods from Canada, and a 10% tariff on goods from China, are expected to take effect on Tuesday. The US conducts around $1.6 trillion in annual business with these three countries combined.

Investors will also be assessing the market impact of the India's Union Budget released over the weekend, which offered a huge income tax relief to the country's middle class and pledged to reduce its fiscal deficit to 4.4% of its GDP for the year beginning April 1.

Last Friday in the US, the three major averages closed lower. The S&P 500 shed 0.50% to end at 6,040.53, while the Dow Jones Industrial Average tumbled 337.47 points, or 0.75%, weighed down by a decline in Chevron. The 30-stock Dow ended the session at 44,544.66. The tech-heavy Nasdaq Composite slipped 0.28% to 19,627.44.

In other news, shares of Taiwan Semiconductor Manufacturing Company listed in Taiwan fell as markets resumed trading after the holidays following a selloff in AI-related stocks last week. TSMC shares fell 6.17% at the open, while shares of Hon Hai Precision Industry lost over 7%. Bitcoin dips below $97,000 after Trump levies tariffs; other cryptocurrencies also tumble. The price of bitcoin was last lower by 3%, according to Coin Metrics, a modest loss compared to the broader crypto market. Earlier, it fell as low as $96,202.42. The U.S. dollar index, which has an inverse relationship with bitcoin, was up nearly 1%.

Bank of Japan officials discussed additional interest rate hikes in the last policy meeting, citing warnings over inflation risks and the economic impact of a weak yen, a summary of opinions from the bank's January meeting showed. One BOJ member suggested that it was necessary to keep raising interest rates to avoid further depreciation of the yen and to prevent the "overheating" of financial activities.

Bitcoin falls, gold rises in risk-off move after US tariffs. Traders appeared to search for safety in early Sunday night trading after the US hit key trade partners with hefty tariffs on goods. Bitcoin dipped back below $100,000, losing 3.6% to trade at $97,554.24. Gold, a traditional safe-haven asset, ticked 0.3% higher to $2,842.60 per ounce.

Oil prices pop after US hits Mexico, Canada and China with tariffs. Oil prices began Sunday trading higher after the US slapped tariffs on goods from China, Canada, and Mexico — all key trading partners. West Texas Intermediate futures were up 2% at $74.20 per barrel. International Brent crude climbed 1% to $76.42 per barrel.

Stocks close Friday's session in the red. After a volatile session, stocks ultimately ended Friday lower. The S&P 500 shed 0.50%, closing at 6,040.53, while the tech-heavy Nasdaq Composite slipped 0.28% and finished at 19,627.44. The Dow Jones Industrial Average dippe

In conclusion, Asian markets traded lower on Monday, February 3, 2025, as worries grew about US President Donald Trump's new tariffs on key trading partners. The Nikkei 225 fell 1.99%, while the Topix lost 1.87%. South Korea's Kospi dropped 2.52%, and the small-cap Kosdaq traded 2.79% lower. Hong Kong's Hang Seng Index fell 1.23% at the open. Chinese markets remained closed for the Lunar New Year holiday. Investors will be closely watching the market impact of the tariffs and the India's Union Budget released over the weekend.