KUALA LUMPUR: President Donald Trump announced yesterday that the United States (US) would introduce a baseline tariff of 10 per cent on all countries and higher duties on some countries, including Malaysia at 24 per cent.
This could put Asian equities under pressure as financial markets open today.
“While this caused an initial relief rally globally, sentiment in Asia is likely to deteriorate as the market digests the higher tariffs directed at specific countries, including China, which is facing 34 per cent tariff on imports and Japan’s 24 per cent duty.
“Vietnam and Cambodia face even steeper tariffs at 46 per cent and 49 per cent, respectively,” investor and global macro analyst ActivTrades’ Anderson Alves said in a market commentary.
Alves said a broad risk-off environment is expected across Asian markets today, with the US dollar likely to outperform regional currencies.
The technology and semiconductor sectors are anticipated to mirror declines in the US market, where the tech-heavy Nasdaq reversed earlier gains, closing three per cent down.
“Market operators will keep a close eye on China’s response to the announced US tariffs.
“Some expect China to close the tap on investment in the US in order to strengthen its negotiation position in US trade talks,” he said.
The White House noted that the US will respond in kind to any attempt to retaliate to the duties.
“The trade battle will likely be the key driver for markets today and for the rest of the week, he added. – BERNAMA
