Asia: Stock markets fall as trade relief fades, eyes on data and earnings
While Donald Trump's agreement with the European Union on Sunday was seen as better than a tariff standoff, observers pointed out that the US president's 15 per cent levies - with none on American goods - were still much higher than before.
The pact, which followed a similar one with Japan last week, still left many worried about the economic consequences, with auto companies particularly worried.
'The 15 per cent blanket levy on EU and Japanese imports may have helped markets sidestep a cliff, but it's no free pass,' said Stephen Innes at SPI Asset Management.
'With the average effective US tariff rate now sitting at 18.2 per cent... the barrier to global trade remains significant. The higher tail risk didn't detonate, but its potential impact on the global economy hasn't disappeared either.'
And National Australia Bank's Ray Attrill added: 'It hasn't taken long for markets to conclude that this relatively good news is still, in absolute terms, bad news as far as the near term (through 2025) implications for eurozone growth are concerned.'
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Traders are also keeping an eye on US talks with other major economies, including India and South Korea.
After a tepid day on Wall Street - which still saw the S&P and Nasdaq hit records - Asia turned negative.
Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Wellington, Taipei, Manila and Jakarta were all in the red.
The euro held its losses from Monday, having taken a hit from worries about the effects of the trade deal on the eurozone.
The first of two days of negotiations between top US and Chinese officials in Stockholm concluded on Monday with no details released, though there are hopes they will agree to extend a 90-day truce that ends on Aug 12.
The two imposed triple-digit tariffs on each other earlier this year in a tit-for-tat escalation, but then walked them back under the temporary agreement reached in May.
Investors are also looking ahead to a busy few days that includes earnings from tech titans Apple, Microsoft, Meta and Amazon, as well as data on US economic growth and jobs creation.
That all comes as the Fed concludes its policy meeting amid increasing pressure from Trump to slash rates, even with inflation staying stubbornly high.
While it is expected to stand pat on borrowing costs, its post-meeting statement and comments from boss Jerome Powell will be pored over for clues about its plans for the second half of the year in light of the tariffs.
Oil prices extended Monday's rally after Trump shortened a deadline for Russia to end its war in Ukraine to Aug 7 or 9, following which he vowed to sanction countries buying its crude. AFP
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CNA
25 minutes ago
- CNA
India accuses EU, US of double standard over Russian trade
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Straits Times
25 minutes ago
- Straits Times
India accuses EU, US of double standard over Russian trade
Sign up now: Get ST's newsletters delivered to your inbox India has sharply criticised the US and the EU, saying it is being unfairly singled out by them over its Russian oil purchases. NEW DELHI - India has sharply criticised the United States and the European Union, saying it is being unfairly singled out by them over its Russian oil purchases when they both trade extensively with Moscow despite the war in Ukraine. India's criticism followed a renewed threat by US President Donald Trump on Aug 4 to raise tariffs on goods from India over its Russian oil purchases, deepening the trade rift between the two countries. In a rare show of unity, Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) and the main opposition Congress on Aug 5 condemned Mr Trump's repeated criticism of New Delhi. India's Foreign Ministry said in a statement issued late on Aug 4 that 'it is revealing that the very nations criticising India are themselves indulging in trade with Russia'. 'It is unjustified to single out India,' the ministry said. It said the EU conducted 67.5 billion euros (S$100.34 billion) in trade with Russia in 2024, including record imports of liquefied natural gas (LNG) reaching 16.5 million metric tons. The United States, the statement said, continues to import Russian uranium hexafluoride for use in its nuclear power industry, palladium, fertilisers and chemicals. It did not give a source for the export information. The US embassy and the EU's delegation in New Delhi did not immediately respond to a request for comment. Both the United States and EU have sharply scaled back their trade ties with Russia since it launched a full-scale invasion of Ukraine in February 2022. In 2021, Russia was the EU's fifth-largest trading partner, with goods exchange worth 258 billion euros, according to the EU executive European Commission. Sudden rift The sudden rift between India and the US has been deepening since July 31, when Mr Trump announced a 25 per cent tariff on Indian goods being shipped to the US and for the first time threatened unspecified penalties for buying Russian oil. India is one of the biggest buyers of crude from Russia, importing about 1.75 million barrels per day from January to June 2025, up 1 per cent from a year ago. Indian refiner Nayara Energy, a major buyer of Russian oil which is majority owned by Russian entities including oil major Rosneft, was subjected to European Union sanctions targeting Russia's oil and energy industry in July. India has said it does not support 'unilateral sanctions' by the EU. Trade experts say Mr Trump's tariff could badly hurt India's economy. Mr Ajay Srivastava of the New Delhi-based Global Trade Research Initiative said he expected Indian goods exports to the US to fall 30 per cent in the current fiscal year ending March 31, to US$60.6 billion from US$86.5 billion in the 2025 fiscal year. India's equity benchmarks fell after Mr Trump's renewed threat of harsh tariffs on goods from India. Mr Manish Tewari, a member of parliament and Congress leader, said Trump's 'disparaging remarks hurt the dignity and self-respect of Indians'. 'The time has come to call out this constant bullying and hectoring,' he added. BJP Vice President Baijayant Jay Panda quoted Henry Kissinger - the most powerful US diplomat of the Cold War era - in a post on X: 'To be an enemy of America can be dangerous, but to be a friend is fatal.' REUTERS
Business Times
25 minutes ago
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Neutrality got the Swiss nowhere on tariffs
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