Asian markets stutter as traders weigh China-US trade flare-up
HONG KONG, China — Asian markets stumbled Wednesday and gold hit a new record as investors kept tabs on China and the United States after they exchanged tariffs, sparking fears of another debilitating trade war between the economic superpowers.
Shanghai, which reopened after a week-long break, and Hong Kong were among the main losers as e-commerce firms took a hit from news that the US Postal Service was suspending inbound parcels from China and Hong Kong.
The tepid performance came despite a positive lead from Wall Street, where there was a sigh of relief that US President Donald Trump had reached a deal to delay 25 percent duties on imports from Canada and Mexico.
Disappointing earnings from Google-parent Alphabet and Advanced Micro Devices added to the unease over the tech sector, which has already been roiled by the unveiling of a new chatbot by Chinese startup DeepSeek.
All eyes were on Washington and Beijing after they renewed their trade spat, though analysts said China's apparently more measured approach provided some hope that a full-blown crisis could be avoided.
"Regarding China's counter measures, we think that the tariffs are less than what we had expected in our view. The move is largely symbolic given that only about 12% of total imports from the US would be subject to tariffs," said Kai Wang, Asia equity market strategist at Morningstar.
"A key takeaway from this development, at least for now, is that fundamentally there is less risk implied than expected before.
"However, escalation of the trade war remains a risk given Trump's history of unpredictable behaviour. Therefore, the volatility risk remains on the table for the next four years at least," Wang added.
Economists at HSBC Global Research added that China's "moves so far are more measured compared with the universal 10 percent tariff imposed by the US, suggesting a likely different playbook than a tit-for-tat strategy, though we acknowledge the risk of escalation has increased".
Hong Kong fell 1.2 percent, with e-commerce giant JD.com sinking more than four percent and rival Alibaba losing more than one percent on news of the US Postal Service suspension.
Trump's tariff announcement