Asia-Pacific markets slide after Trump's tariff announcement rocks sentiment

Asia-Pacific markets plunged on Thursday, after U.S. President Donald Trump imposed hefty reciprocal tariffs on over 180 countries and territories — several of which are in the region.

In charts posted on social media, the White House showed the effective tariff rates they claim other countries impose on American goods, including by “currency manipulation and trade barriers.”

The White House told CNBC’s Eamon Javers on Wednesday that the new reciprocal rate on China will be added to existing tariffs totaling 20%, meaning the true tariff rate on Beijing under this Trump term is 54%.

Meanwhile, goods from India, South Korea and Australia face tariffs of 26%, 25% and 10%, respectively.

Chris Kushlis, chief emerging markets Macro Strategist at T. Rowe Price says the fresh tariffs “represent a significant increase in tariffs on Asian exports, and arguably more than anticipated by the market.”

The U.S. accounts for approximately 15% of exports from the region, meaning that tariff increases ranging between 20% and 35% “would pose a meaningful headwind to growth this year, especially for the more open trade-oriented economies,” he noted.

“Many Asia economies have a relatively high proportion of their export value added that ends up in the US, so the broad application of tariffs globally will hinder effects to redirect trade,” Kushlis added.

What is interesting is that China “which has the biggest trade deficit with the U.S. does not have the largest reciprocal tariffs,” said Stephen Dover, chief market strategist and head of Franklin Templeton Institute at Franklin Templeton.

Instead, he highlighted that Southeast Asia — which has benefitted from past tariffs on China — has “some of the highest reciprocal tariffs.”

Japanese markets led losses in Asia. The benchmark Nikkei 225 plunged 2.98%, paring losses of over 4% in early trade, while the broader Topix index was down 3.29% in its last hour.

Hong Kong’s Hang Seng Index declined 1.56% while mainland China’s CSI 300 was fell 0.52%.

Over in South Korea, the Kospi index fell 1.22%, paring losses from over 3%, while the small-cap Kosdaq was down 0.32% in its final hour of trade.

India’s benchmark Nifty 50 was 0.25% fell while the broader BSE Sensex declined 0.35%.

Australia’s S&P/ASX 200 fell 0.94% to close at 7,859.70. The country’s S&P Global Purchasing Managers’ Index reading came in at 51.6 in March, compared to 51.3 in the month before.

Spot gold hit a record high and was trading at $3,125.89 per ounce as at 2.24 p.m. Singapore time, as investors flocked to the precious metal.

Looking ahead, Franklin Templeton’s Dover said that the tariffs “do not work if prices do not increase.”

“The average American family may pay up to an estimated $4,200 more per year because of today’s tariffs (assuming an average 20% tariff rate on imports),” he wrote in a Thursday note.

What this means is that the tariffs, will likely slow household and business spending, thereby increasing the “risk of U.S. growth and earnings disappointments in 2025,” Dover added.

U.S. futures cratered as Trump’s sweeping tariffs of at least 10% and even higher for some countries, raised the risks of a global trade war that would adversely affect the already slowing U.S. economy.

Overnight stateside, stocks climbed in yet another volatile session.

The S&P 500 advanced 0.67% to close at 5,670.97, while the Nasdaq Composite added 0.87% and ended at 17,601.05.

The 30-stock Dow Jones Industrial Average added 235.36 points, or 0.56%, and settled at 42,225.32.

Shares of Tesla climbed 5.3%, rising on news that President Trump has signaled to his cabinet that Elon Musk will be stepping back

— CNBC’s Brian Evans and Sean Conlon contributed to this report.