Stocks, Bonds Drop as US-China Trade Spat Heats Up
Asian shares fell at the open after further tariff tensions between the world’s two biggest economies sent US stocks, bonds and the dollar lower, underscoring the fragile appetite for risk globally.
Indexes in Japan, Australia and South Korea retreated after the S&P 500 dropped 3.5% Thursday, as market euphoria turned to angst after the White House clarified US tariffs on China rose to 145%. The dollar extended its losses after suffering its worst day since 2022. The Swiss franc touched the highest level in a decade, the yen strengthened and gold set a new high, showing their appeal as havens. US Treasuries resumed a selloff from earlier in the week.
Just a day after financial markets cheered President Donald Trump’s decision to delay some of his tariff plans, the US assets selloff suggests skepticism about the planned trade talks and escalating tensions with China. The much-vaunted America-first trade — buying up assets that win when the US outperforms the rest of the world — is also reversing on concern that the steepest increase in US levies in a century will hammer the economy.
“Investors are sobering up and realizing that the US-China ‘food fight’ will probably get worse before it gets better,” said Michael Bailey at FBB Capital Partners.
Source: Bloomberg
