Asian Stock Markets Mixed Following Trump’s EU Tariff Delay

Asian stocks delivered a mixed performance on Monday after U.S. President Donald Trump reignited trade tensions with the European Union, threatening steep new tariffs before later announcing a delay in their implementation.

Markets were beginning to stabilize after a bond-driven selloff last week, but Trump’s renewed trade threats sent fresh jitters across global markets. He announced plans to impose 50 tariffs on the EU starting June 1, claiming trade talks were “going nowhere”. He also warned of 25% tariffs on smartphone manufacturers that fail to produce their devices in the United States.

The news rattled Wall Street and European bourses on Friday, pushing major indexes into the red. However, Asian markets received some relief after Trump said Sunday he would postpone the EU tariffs until July 9 following a “very nice call” with European Commission President Ursula von der Leyen. He added that both sides would “rapidly get together” to resolve the impasse.

In Asia, Tokyo, Shanghai, and Seoul posted gains, while markets in Hong Kong, Sydney, Singapore, Wellington, Taipei, Manila, and Jakarta declined.

The U.S. dollar remained under pressure following a drop on Friday. Analysts say the market remains on edge amid Trump’s unpredictable policy shifts, which continue to unsettle investors.

Concerns are also growing over Trump’s proposed tax cuts and spending plans, which analysts warn could significantly increase the U.S. national deficit and drive Treasury yields higher—posing risks to the broader economy.

“Most believed the 50% tariffs wouldn’t stick for long and would be dialled down to around 20% post-June 1,” said Chris Weston of Pepperstone.

“Sunday’s move just confirms tariffs are being used more as a negotiation tactic than a long-term strategy.”

Focus Turns to Fed Minutes

With a relatively quiet week ahead on the global data front, analysts say trade developments will likely dominate market sentiment.

Investors are also awaiting the release of minutes from the U.S. Federal Reserve’s latest policy meeting, seeking insight into the central bank’s economic outlook amid ongoing trade tensions. Attention will also be on Friday’s release of the Fed’s preferred inflation gauge — the U.S. Personal Consumption Expenditures (PCE) index.

Michael Hewson of MCH Market Insights noted the Fed recently signalled rising uncertainty in its post-meeting statement, highlighting increased risks of both inflation and unemployment. “This presents a dilemma for the Fed’s dual mandate, as any policy response to one issue may worsen the other,” he said.

Hewson also pointed to a sharp drop in U.S. consumer confidence in recent months, warning that persistent political brinkmanship could damage domestic sentiment. “That could reverse if the government realizes its confrontational approach is doing more harm than good,” he added.

Corporate Highlights

Despite Trump’s threat of smartphone tariffs, Samsung shares rose over 1% in Seoul. In Tokyo, Nippon Steel surged as much as 7.4% after Trump voiced strong support for a new “partnership” between the Japanese company and U.S. Steel.

His backing marks the latest development in the ongoing saga surrounding Nippon Steel’s proposed $14.9 billion acquisition of U.S. Steel, announced in late 2023. Trump emphasized that U.S. Steel’s headquarters would remain in Pittsburgh and predicted the partnership would create 70,000 jobs and generate $14 billion for the U.S. economy.

However, key details of the deal remain unclear, as neither the White House nor the companies have released an official statement outlining the terms.

U.S. Steel shares soared 21% in New York on Friday.

Market Snapshot (as of 0300 GMT)

Tokyo – Nikkei 225: +0.5% at 37,329.22

Hong Kong – Hang Seng Index: –0.7% at 23,447.04

Shanghai – Composite: +0.1% at 3,352.76

Currencies:

Euro/Dollar: $1.1395 (up from $1.1369)

Pound/Dollar: $1.3564 (up from $1.3535)

Dollar/Yen: 142.55 yen (down from 142.57 yen)

Euro/Pound: 84.00 pence (up from 83.96 pence)

Oil Prices:

WTI Crude: +0.2% at $61.66 per barrel

Brent Crude: +0.2% at $64.91 per barrel

Major Index Closures (Friday):

New York – Dow Jones: –0.6% at 41,603.07

London – FTSE 100: –0.2% at 8,717.97

— AFP