Manila, Sept 26: Asian shares fell on Friday after President Donald Trump announced plans for new tariffs including 100 per cent import taxes on pharmaceutical drugs starting October 1.
Trump said Thursday on his social media site that foreign makers of furniture and cabinetry were flooding the United States with their products and that tariffs must be applied “for National Security and other reasons.”
He said foreign-made heavy trucks and parts are hurting domestic producers. However, most such trucks are either made in America or are US brands made in Canada or Mexico.
US futures and oil prices edged higher.
Most Asian indexes were in the red, with Japan’s Nikkei 225 down nearly 0.9 per cent to 45,354.99.
Sumitomo Pharma Co’s shares lost 3.5 per cent while Chugai Pharmaceutical sank nearly 3 per cent.
Government data on Friday showed inflation in the Tokyo area rose 2.5 per cent year-on-year in September, matching the pace in August but falling below expectations of an uptick to 2.8 per cent. Inflation, however, was still above the Bank of Japan’s 2 per cent target, leading to speculation about a rate hike later this year.
South Korea’s Kospi tumbled 2.5 per cent to 3,386.01 in a third consecutive session of losses amid growing worries over prolonged tariff negotiations with the US.
In Chinese markets, Hong Kong’s Hang Seng index fell nearly 0.5 per cent to 26,357.15 while the Shanghai Composite index was down 0.6 per cent to 3,831.80.
Australia’s S&P/ASX 200 rose 0.2 per cent to 8,787.70. India’s BSE Sensex fell 0.5 per cent while Taiwan’s Taiex lost 1.7 per cent.
On Thursday, Wall Street stumbled to a third straight loss as US stocks gave back more of their big gains for the year so far.
The S&P 500 fell 0.5 per cent to 6,604.72, marking its longest losing streak in more than a month. The Dow Jones Industrial Average dropped 0.4 per cent to 45,947.32, and the Nasdaq composite sank 0.5 per cent to 22,384.70. All three indexes are still near their records set at the start of the week.
Stocks felt pressure from reports showing the US economy may be stronger than economists thought. While that’s encouraging news for workers and for people looking for jobs, it could make the Federal Reserve less likely to cut interest rates several times in the coming months.
The Fed just delivered its first cut of the year last week, and officials had pencilled in more through the end of next year. That was critical for Wall Street after US stocks shot to records since April in large part because of expectations for rate cuts.
Easier rates can boost the economy and make investors more willing to pay high prices for stocks and other investments.
If the Fed doesn’t cut rates as often as investors expect, it would empower criticism that the US stock market is too expensive after rising so much, so quickly.
Treasury yields ticked higher in the bond market as traders pared bets for the number of upcoming cuts to rates by the Fed. The yield on the 10-year Treasury rose to 4.17 per cent from 4.16 per cent late Wednesday.
“For Asia, this is not just noise from abroad — it is structural vulnerability laid bare. Tariffs aimed at pharma may be targeted, but they ripple through investor psychology like a pebble dropped into a still pond. And with valuations stretched, every tremor feels magnified,” Stephen Innes of SPI Asset Management wrote in a commentary.
In other dealings early Friday, benchmark US crude added 36 cents to USD 65.34 per barrel. Brent crude, the international standard, climbed 26 cents to USD 68.84 per barrel.
The US dollar edged up to 149.76 Japanese Yen, from 149.75 Yen. The Euro rose to USD 1.1677 from USD 1.1667. (AP)
