Asia markets were mixed in early trade on Tuesday following an escalation in trade tensions between the United States and China.
Australia’s ASX 200 fell 0.29 percent as the energy and materials sectors fell 0.78 and 0.77 percent. The heavily-weighted financial subindex was up 0.37 percent as the country’s four major banks gained: Shares of ANZ rose 0.6 percent and Commonwealth Bank added 0.42 percent.
Japan’s Nikkei 225 rose 0.39 percent and the Topix index was up 0.52 percent. The Japanese market resumed trading after being closed Monday for a public holiday.
In South Korea, the Kospi was down 0.24 percent as blue chip stocks traded mixed. Shares of Samsung Electronics were up 0.1 percent, Korea Electric Power Corporation was down 1.2 percent and Hyundai Motor added 0.8 percent.
South Korean President Moon Jae-in left for Pyongyang on Tuesday for a historic summit with North Korean leader Kim Jong Un, with the aim of mediating stalled U.S.-North Korea nuclear talks and to strengthen inter-Korean relations, according to Yonhap news agency.
Stateside, President Donald Trump will impose 10 percent tariffs on $200 billion worth of Chinese imports, and those duties will rise to 25 percent at the end of the year, according to a Monday announcement. The White House removed about 300 goods from a previously proposed list of affected products, including smart watches, some chemicals and other products such as bicycle helmets and high chairs. Beijing has already warned that it will retaliate against the measures.
The U.S. has already levied tariffs on $50 billion worth of Chinese products. Beijing responded with measures targeting $50 billion on American goods, raising fears about damage to the U.S. farm industry.
Earlier this month, reports suggested that the U.S. was seeking to restart trade talks with China.
U.S. futures also declined during early Asian hours, following the announcement. Dow futures were down some 80 points while Nasdaq and S&P futures also pointed to negative opens. That followed losses on Wall Street where the Nasdaq Composite fell 1.4 percent.
Analysts said that the focus will now shift towards China’s response to the announcement.
“China may be limited in its ability to impose similar tariffs in volume terms, but it can still aim to disrupt the US supply chain with those tech exports an obvious target and the cancelation of trade talks is also likely to dampen the mood,” Rodrigo Catril, a senior foreign-exchange strategist at the National Australia Bank, wrote in a morning note.
“We think (the) US trade spat with China is not just about bringing manufacturing and jobs back to the US, strategically the US is not happy with the approach China has taken in order (to) modernise itself,” Catril added, noting that one of the key sticking points is intellectual property rights.
In the currency market, the Japanese yen strengthened slightly against the dollar, trading at 111.77, compared to a previous low of 111.83.
The dollar index, which measures the greenback against a basket of currencies, traded at 94.572 at 8:35 a.m. HK/SIN, having declined from levels above 94.800 previously.
Analysts at the Commonwealth Bank of Australia suggested that if China decided to cancel new trade talks in response to the U.S. tariffs action, the dollar would likely recover most of its recent losses.
— CNBC’s Jacob Pramuk contributed to this report.
