(Sharecast News) - Markets across the Asia-Pacific region declined sharply on Friday after US president Donald Trump confirmed that tariffs on imports from Canada and Mexico would take effect next week.
Trump said overnight that the 25% tariffs, set to be implemented on 4 March after a prior delay, were necessary due to what he alleged was insufficient action by the countries to curb drug trafficking.
Additionally, the president announced an extra 10% tariff on Chinese imports, compounding existing trade tensions.
"Asian markets faced heightened pressure amid a global stock sell-off, with the dollar strengthening and Treasury yields edging lower as investors shifted away from high-risk assets following Trump's escalation of tariffs," said TickMill's market strategy partner Patrick Munnelly.
"Markets were rattled by mounting concerns that Trump's latest tariffs targeting China, Canada, and Mexico could dampen global economic growth.
"Investors steered clear of riskier assets, resulting in a sharp sell-off in Hong Kong's tech sector."
Munnelly pointed to economists cautioning that the measures could curb US GDP growth, drive up inflation, and potentially spark recessions in Canada and Mexico.
"The plan includes imposing tariffs on over $1trn worth of imports unless last-minute negotiations yield a resolution."
Markets in the red across the region, NZX lifted by cancer diagnostics firm
In Japan, the Nikkei 225 led regional losses, dropping 2.88% to 37,155.50, with technology firms among the hardest hit.
Semiconductor testing company Advantest tumbled 8.78%, while cable manufacturer Fujikura fell 7.32% and chip equipment maker Lasertec declined 7.15%.
The broader Topix index shed 1.98% to 2,682.09.
Chinese markets also saw steep declines - the Shanghai Composite lost 1.98% to close at 3,320.90, while the Shenzhen Component dropped 2.89% to 10,611.24.
Leading losses in Shanghai were ArcSoft, down 11.49%, Suzhou TZTEK Technology, which lost 10.66%, and Suzhou HYC Technology, down 10.07%.
Hong Kong's Hang Seng Index suffered the region's biggest decline, falling 3.28% to 22,941.32, as major stocks including BYD Electronic International, Longfor Properties, and Xinyi Solar Holdings all lost more than 8.5%.
South Korea's Kospi 100 fell 3.54% to 2,515.04, weighed down by steep losses in technology and industrial stocks.
Posco ICT plunged 10.12%, Netmarble Games declined 9.24%, and Korea Electric Power dropped 8.57%.
In Australia, the S&P/ASX 200 shed 1.16% to 8,172.40, with IDP Education falling 7.8%, Endeavour Group losing 7.13%, and Neuren Pharmaceuticals down 6.83%.
New Zealand's S&P/NZX 50 was the only major index to gain, rising 0.48% to 12,601.42, driven by a surge in Pacific Edge shares.
The cancer diagnostics firm more than doubled in value, jumping 111.11%, after the American Urological Association included its Cxbladder test in standard care guidelines.
Elsewhere in Wellington, Vista Group International gained 13.73%, while Summerset Group rose 5.47%.
In currency markets, the dollar was last up 0.37% on the yen, trading at JPY 150.37, as it gained -.34% against the Aussie to AUD 1.6091, and strengthened 0.57% on the Kiwi, changing hands at NZD 1.7857.
Oil prices declined, with Brent crude futures last down 1.38% on ICE to $73.02 per barrel, while the NYMEX quote for West Texas Intermediate dropped 1.41% to $69.36.
Tokyo inflation eases in February, Japan retail sales grow faster
In economic news, Tokyo's inflation rate eased in February, with headline consumer prices rising 2.9% year-on-year, down from 3.4% in January.
Core inflation, which excludes fresh food prices, slowed to 2.2%, slightly below the 2.3% forecast by economists.
The capital's inflation figures are closely watched as an early indicator of nationwide trends.
Last week, Japan reported that nationwide inflation in January climbed 4% from a year earlier, the highest level in 12 months.
Meanwhile, Japan's retail sales saw their fastest growth in nearly a year, rising 3.9% year-on-year in January.
That was an improvement from December's revised 3.5% increase but fell just short of the 4% growth expected by analysts.
Fuel sales led the gains, surging 8.7% compared to a year earlier.
Reporting by Josh White for Sharecast.com.
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