Stocks drop as Trump's Brazil, Argentina tariffs revive trade angst

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.

FILE PHOTO: An investor looks at an electronic board showing stock information at a brokerage house in Shanghai, China September 7, 2018. REUTERS/Aly Song

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

Pan-region Euro Stoxx 50 futures were up 0.41% in early trades, while German DAX futures added 0.45% and FTSE 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 Nikkei 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 Shanghai Composite Index was down 0.08% after earlier hitting its lowest point since Aug. 26.

Hong Kong’s Hang Seng Index 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

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