Australian stocks took a hit on Wednesday as concerns of a full-blown trade war between the US and China wiped billions of dollars off the market. The S&P/ASX 200 opened lower, plunging more than 2% before slightly recovering. Mining and biotech companies were early casualties, with BHP and CSL shares falling over 4%. The New Zealand Reserve Bank cut interest rates in response to global economic turmoil caused by US trade tariffs.
As Donald Trump’s new tariffs on multiple countries, including a 104% tariff on China, are set to take effect, fears of a global recession loom. South Korea announced emergency support measures for its auto sector to mitigate the impact of new tariffs. Trump, however, reassured House Republicans that his tariffs are necessary and claimed that companies are returning to the US.
China, Hong Kong, and Taiwan stocks fell as the US-China trade war escalated, with many listed firms announcing share buybacks to support the market. Meanwhile, Vietnam seeks a delay on tariffs and plans to buy more US goods. Trump announced a “major” tariff on pharmaceuticals to incentivize drug companies to relocate to the US.
In Japan, South Korea, New Zealand, and Australia, stocks declined after another Wall Street retreat following the announcement of higher tariffs. The Bank of Japan is carefully analyzing how US tariffs could affect the economy and impact monetary policy decisions. Australian shares plunged 2% amid uncertainty surrounding trade negotiations between the US and China.
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