Asian stock markets surged on Thursday following a relief rally triggered by U.S. President Donald Trump’s decision to delay the imposition of severe tariffs on global trade partners. This move also included a significant escalation of duties on China, raising the stakes in the ongoing trade dispute.
The rally followed a tumultuous period when markets experienced steep declines after Trump’s initial announcement of aggressive tariffs last week, which sparked widespread concerns of a potential global recession.
Trump revealed he would delay for 90 days the tariffs that were due to take effect soon, giving markets time to stabilize. Despite the delay, he maintained a 10% tariff on many countries and escalated pressure on China, which responded with its own retaliatory tariffs. China’s measures, which took effect at 0401 GMT on Thursday, were described by Beijing as likely to harm the global economic order.
Trump’s decision was attributed to market panic, with the president noting that investors had “jumped a little bit out of line” in reaction to the tariffs. The additional tariffs on China were framed as a response to the country’s lack of respect for global markets.
Despite the sharp rise in tensions, Trump insisted that his approach remained flexible. His chief trade advisor, Peter Navarro, hailed the announcement, suggesting that it would mark a historic moment in U.S. trade negotiations.
The announcement led to a buying frenzy across global markets, particularly in Asia and Europe, as investors reacted to the potential for reduced trade tensions. Hong Kong’s stock index rebounded by over 2%, while Shanghai gained more than 1%. Japan’s Nikkei saw an impressive 9% surge, while other regional markets, including Seoul, Taipei, and Singapore, also enjoyed significant gains.
This market optimism was supported by expectations that China would introduce new economic stimulus measures to counteract the effects of the tariffs. Meanwhile, gold prices surged, driven by the weakened U.S. dollar and growing uncertainty in global markets.
However, experts remain cautious, with some warning that the ongoing trade standoff between the U.S. and China could lead to a broader economic decoupling between the world’s two largest economies. This risk is compounded by concerns over potential inflation due to tariffs, which has put the U.S. Federal Reserve in a challenging position as it considers future interest rate decisions.
At the close of trading, key indices showed strong growth:
- Tokyo (Nikkei 225): +9.1% at 34,609
- Hong Kong (Hang Seng): +2.7% at 20,804
- Shanghai (Composite): +1.2% at 3,223.64
- London (FTSE 100): +6.1% at 8,145.26
- New York (Dow): +7.9% at 40,608.45
This rally follows a volatile few days for Asian markets, which had been hit hard by concerns over a potential global economic downturn. However, the situation remains fluid, with ongoing negotiations between the U.S. and its trade partners expected to shape the future of global markets.
