Equity markets showed mixed results on Wednesday as investors anxiously awaited the announcement of President Donald Trump’s new wave of tariffs. Speculation over the scope and impact of the measures fueled uncertainty across global trading floors.
Ahead of the announcement, US markets had already faced significant volatility. Trump has called the tariffs “Liberation Day,” warning that both allies and adversaries are targets after what he described as years of exploitation by foreign nations. Initially, Trump had suggested the tariffs would mirror those imposed by other countries, but recent reports indicate he may opt for blanket tariffs of up to 20 percent or offer preferential treatment to certain countries.
In addition, the 25 percent auto tariffs Trump announced last week are set to take effect on Thursday.
The White House confirmed that Trump will unveil his decision at 4:00 pm Washington time (2000 GMT), after Wall Street closes. The Republican president has promised the tariffs will herald a “golden age” for US industry, though officials admitted that some details were still being finalized late on Tuesday.
Market analysts are concerned about the continuing uncertainty surrounding the tariffs. “Investors and company management dislike uncertainty, and the inconsistent way in which tariff announcements are being delivered is increasing it,” said Oliver Blackbourn and Adam Hetts from Janus Henderson Investments.
“Estimates on the potential average tariff rate vary significantly, from moderate increases to double-digit hikes,” they added. “What’s clearer is that tariffs are likely to have negative consequences for economic growth, consumers, and markets.”
Chris Weston of Pepperstone Group noted that an immediate implementation of the tariffs would provide some clarity, even if it limits the possibility for negotiations. “While this scenario is hardly positive for economic prospects, it would strengthen our response to the situation,” he said.
The growing fears of a global trade war have prompted several countries to prepare retaliatory measures, heightening concerns that economic growth could be affected, and inflation might surge, possibly ending hopes for further interest rate cuts by central banks.
Asian stock markets fluctuated between gains and losses. Tokyo, Shanghai, Sydney, Wellington, Taipei, Mumbai, and Bangkok posted slight gains, while markets in Hong Kong, Singapore, Manila, and Seoul experienced declines. London, Paris, and Frankfurt opened lower.
Gold, seen as a safe haven in uncertain times, remained above $3,100 after hitting a record high of $3,149.00 on Tuesday. HSBC strategists, led by Max Kettner, warned that the April 2 tariff deadline could bring further uncertainty and prolong market weakness.
In Hong Kong, Chinese tech giant Xiaomi saw its stock drop by three percent after confirming that one of its electric vehicles was involved in a deadly accident in China.
Key Market Figures (as of 0715 GMT):
- Tokyo (Nikkei 225): Up 0.3% at 35,725.87
- Hong Kong (Hang Seng Index): Down 0.1% at 23,174.59
- Shanghai (Composite): Up 0.1% at 3,350.13
- London (FTSE 100): Down 0.3% at 8,609.85
Currency and Commodity Updates:
- Euro/Dollar: Up at $1.0795 from $1.0793 on Tuesday
- Pound/Dollar: Down at $1.2914 from $1.2920
- Dollar/Yen: Up at 149.77 yen from 149.53 yen
- Euro/Pound: Up at 83.57 pence from 83.51 pence
- WTI Crude: Down 0.3% at $71.01 per barrel
- Brent Crude: Down 0.3% at $74.30 per barrel
- New York (Dow): Flat at 41,989.96
