Asia report: Markets mixed as Trump announces 25pc auto tariffs

27th Mar 2025 09:07

(Sharecast News) - Asia-Pacific markets ended mixed on Thursday as investors reacted to fresh US tariffs on auto imports, announced by president Donald Trump on Wednesday.

The move rattled sentiment, particularly among automakers, and followed a negative lead from Wall Street overnight.

"Asian stocks declined after president Trump announced a 25% tariff on US auto imports, prompting investors to reduce risk exposure amid concerns over growth in the world's largest economy," noted TickMill market strategy partner Patrick Munnelly, adding that shares of automakers also fell.

"The MSCI regional benchmark dropped, though Hong Kong shares posted gains.

"The evolving US trade sanctions on both allies and adversaries have amplified market uncertainties, leaving investors grappling with the potential impacts on global trade and economic performance."

Munnelly said that just two months into Trump's presidency, market sentiment had turned cautious, with optimism tempered and the Federal Reserve signalling no immediate urgency to adjust interest rates.

"Trump issued an order enforcing a 25% tariff on all automobiles not manufactured in the US.

"In a statement released later on Wednesday, he confirmed the tariffs would take effect at 1201 Washington time on 3 April.

"In a Truth Social post, Trump reiterated his stance, threatening further tariffs on the EU and Canada if they acted against US interests."

Markets mixed as investors react to Trump's latest tariff tirade

Japan's Nikkei 225 fell 0.6% to 37,799.97, weighed down by steep losses in auto and electronics stocks.

Advantest dropped 7.44%, while Fujikura and Mazda Motor fell 7.02% and 5.99%, respectively.

However, the broader Topix index edged up 0.09% to 2,815.47, signaling some resilience in non-export sectors.

Chinese markets posted modest gains, with the Shanghai Composite up 0.15% to 3,373.75 and the Shenzhen Component rising 0.23% to 10,668.10.

Gains were driven by strong performances in select small-cap stocks - TianJin Global Magnetic Card, Jiangsu SOPO Chemical, and Shanghai Vohringer Wood Product all surged more than 10%.

Hong Kong's Hang Seng Index advanced 0.41% to 23,578.80, supported by a rebound in consumer and biotech names.

ENN Energy soared 11.02%, while Haidilao International and WuXi Biologics added 6.02% and 5.92%, respectively.

In South Korea, the Kospi 100 dropped 1.32% to 2,644.33, with industrial and energy stocks leading the declines.

Hyundai Electric Energy Systems plunged 8.71%, DB Insurance lost 7.76%, and LS Industrial Systems fell 6.52%.

Australia's S&P/ASX 200 slipped 0.38% to 7,969.00, as tech and healthcare names weighed on the index.

Pro Medicus fell 7.79%, Zip Co dropped 7.39%, and data center operator Nextdc lost 6.46%.

New Zealand's S&P/NZX 50 edged down 0.23% to 12,305.79, as Vital Healthcare Property Trust, Infratil, and Mainfreight all declined more than 2%.

In currency markets, the dollar was last up 0.2% on the yen, trading at JPY 150.87, as it weakened 0.12% against the Aussie to AUD 1.5857, and retreated 0.22% from the Kiwi, changing hands at NZD 1.7417.

Oil prices were marginally lower, with Brent crude futures last down 0.28% on ICE at $73.58 per barrel, and the NYMEX quote for West Texas Intermediate off 0.24% at $69.48.

Japan PM hints at response to US trade barriers

In economic news, Japan signaled a potential response to rising US trade barriers, as prime minister Shigeru Ishiba told parliament that "all options" were being considered following Washington's latest move to impose a 25% tariff on imported automobiles.

Ishiba questioned the logic of applying uniform tariffs to all countries, noting that Japan remained one of the largest sources of foreign investment in the United States.

The new tariffs, which US president Donald Trump said would take effect 2 April on all cars not manufactured domestically, had added to growing global trade tensions.

Trump also imposed additional 20% tariffs on Chinese goods in recent weeks, intensifying concerns over a broader escalation.

Analysts warned that tariff levels were now rising to historical highs.

According to Barclays, the US weighted average tariff rate had already tripled from 2.5% at the end of 2024 to over 8% following Trump's measures.

The bank's strategist Michael McLean projected that if current trends continued, that figure could reach as high as 15% - levels not seen since before World War II.

In China, fresh official data showed that industrial profits declined 0.3% in the first two months of 2025 compared with a year earlier.

It marked the third consecutive annual contraction, highlighting continued strain on the manufacturing sector amid worsening global trade conditions.

Reporting by Josh White for Sharecast.com.