SINGAPORE (Reuters) – Stocks dived, bonds surged, the dollar rose and Asia’s markets were set to slide on Thursday as U.S. President Donald Trump announced a bigger-than-expected wall of tariffs around the world’s largest economy, upending trade and supply chains.
Nasdaq futures tumbled 4%, with tech on the front line because China – hit with a 34% levy on top of a previous 20% tariff – is such a significant manufacturing hub. Apple shares were down nearly 7% in after-hours trade.
S&P 500 futures fell 3.3% and Nikkei futures dropped more than 4%. Australian shares fell 2%.
The U.S. dollar was higher in rollercoaster currency trade, except against the safe-haven yen which surged to 148.15 per dollar.
Gold was within a whisker of new record highs and U.S. Treasury futures leapt on fears of a U.S. economic slowdown. Oil, which trades as a proxy for global growth, fell more than 2% to leave U.S. crude futures at $69.73 a barrel.
Trump announced a baseline 10% tariff on imports with far higher levies on some trading partners, particularly in Asia.
Besides China’s 34% tax, Japan got a 24% tariff, Vietnam 46% and South Korea 25%. The European Union was hit with a 20% levy.
Van Eck’s Vietnam ETF fell more than 8% in after-hours trade.
Trump also shut a loophole used to ship low-value packages from China, which is likely to hurt China’s giant online retailers.
Trading partners are expected to respond with countermeasures of their own that could lead to dramatically higher prices.
“We would characterise this slate of tariffs as ‘worse than the worst case scenario’ the Street was fearing,” said analysts at Wedbush, with the technology supply chain in Taiwan and China hit hard.
U.S. interest rate futures leapt as investors priced in slowing U.S. growth and a higher chance of rate cuts.
“The tariff rates unveiled this morning far exceed baseline expectations, and if they aren’t negotiated down promptly, expectations for a recession in the U.S. will rise dramatically,” said IG market analyst Tony Sycamore.
(Reporting by Tom Westbrook; Editing by Sam Holmes)
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