Asian markets tumble as US tariffs on China takes effect at 104 pc

Asian markets extended their slide on Wednesday, 9 April reacting sharply to the latest round of US tariffs targeting Chinese imports, including a substantial 104 per cent duty, which came into effect just after midnight Eastern Time. The escalating trade tensions sparked widespread uncertainty among investors, sending major indices across Asia into the red.

Japan's benchmark Nikkei 225 plunged nearly 4 per cent at the opening bell, before recovering slightly to trade 3.5 per cent lower at 31,847.40. South Korea’s Kospi index fell 1 per cent to 2,315.27, while Australia’s S&P/ASX 200 declined 2 per cent to 7,359.30. Markets in New Zealand also registered losses.

The global market downturn followed a volatile day on Wall Street. On Tuesday, the S&P 500 sank 1.6 per cent, reversing earlier gains of over 4 per cent, and moving almost 19 per cent below its February record. The Dow Jones Industrial Average dropped 0.8 per cent, while the tech-heavy Nasdaq composite slipped 2.1 per cent.

Investors remain on edge as the full impact of President Donald Trump's tariff strategy unfolds. While the White House confirmed that the new levies—set at a staggering 104 per cent—are now in place with no planned exemptions, financial markets are grappling with the implications for global trade and economic growth.

Analysts have cautioned that prolonged tariffs could drive up consumer prices in the US and risk tipping the economy into recession. Conversely, if negotiations materialise and result in a rollback, the worst-case outcomes might be avoided.

Despite the gloom, a glimmer of optimism emerged on Tuesday following Trump's discussions with South Korea’s acting president. Trump described the talks as helping to define the “confines and probability of a great DEAL for both countries.” The announcement briefly lifted markets earlier in the day, with Tokyo climbing 6 per cent, Paris gaining 2.5 per cent, and Shanghai rising 1.6 per cent before the downturn resumed.

China, meanwhile, has vowed to respond with countermeasures, warning it will “fight to the end” in the escalating trade dispute. The Chinese government signalled that further retaliatory steps are likely if the US continues to increase tariffs.

White House press secretary Karoline Leavitt confirmed that the tariff hike was intended to be comprehensive, with no carve-outs, as reinforced by US Trade Representative Jamieson Greer. Greer also noted that approximately 50 countries have reached out to Washington to explore negotiations, signalling widespread concern over the impact of the protectionist shift.

Trump's aggressive stance on trade, which he says aims to reduce the US trade deficit and promote reciprocity, represents a fundamental challenge to the globalisation model that has defined international commerce in recent decades. While his supporters argue that the policy could revive domestic manufacturing, critics warn that it may isolate the US and disrupt the global supply chain.

As investors brace for more volatility, all eyes are now on whether diplomatic backchannels can defuse the mounting trade tensions—or if a prolonged economic standoff is set to reshape global markets in the months ahead.