Asian stocks drop as Trump's new tariffs revive trade gloom

By Andrew Galbraith

SHANGHAI (Reuters) – Asian shares fell on Tuesday after U.S. President Donald Trump stunned markets by imposing tariffs on imports from Brazil and Argentina, rekindling fears over global trade tensions, while weak U.S. factory data added to the investor gloom.

But European shares, which had also slumped following Trump’s tariff announcement, were expected to rise on Tuesday.

Pan-region were up 0.41% in early trades, while German added 0.45% and futures gained 0.26%.

U.S. S&P 500 e-mini stock futures also pointed higher, rising 0.2% to 3,120.5.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.43% as Australian shares recorded their worst day in two months with a 2.2% drop.

Japan’s shed 0.64%.

But some Asian indexes rebounded in afternoon trade from session lows.

China’s blue-chip CSI300 index fell as much as 0.62% before clawing back to register small gains. The was down 0.08% after earlier hitting its lowest point since Aug. 26.

Hong Kong’s was 0.24% lower after earlier falling as much as 1.44%.

In tweets on Monday, Trump said he would impose tariffs on steel and aluminium imports from Brazil and Argentina, attacking what he saw as both countries’ “massive devaluation of their currencies.”

Contrary to his remarks, both Brazil and Argentina have been trying to strengthen their respective currencies against the dollar.

Steven Daghlian, market analyst at CommSec in Sydney, said while the South American tariffs dominated market worries on Tuesday, China’s response to U.S. support for anti-government protesters in Hong Kong has also chilled sentiment.

“Markets are extremely sensitive to any good or bad news on the U.S.-China dispute front, but also the U.S. relationship with other nations as well,” he said.

China said on Monday U.S. military ships and aircraft won’t be allowed to visit Hong Kong, and also announced sanctions

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