NEW YORK/SINGAPORE, Feb 19 — Asian stocks wavered today after the S&P 500 and European shares ended at record highs, in the face of US President Donald Trump's latest tariff threats on auto, semiconductor and pharmaceutical imports.
Since Trump's inauguration four weeks ago, Trump has imposed a 10 per cent tariff on all imports from China, on top of existing levies. He has also announced, and delayed for a month, 25 per cent tariffs on goods from Mexico and non-energy imports from Canada.
Trump told reporters yesterday that sectoral tariffs on pharmaceuticals and semiconductor chips would start at "25 per cent or higher, and it will go very substantially higher over the course of a year". He intends to impose similar tariffs on autos as soon as April 2.
Market reaction to Trump's threats were muted as investors increasingly see them as bargaining tools, although the US dollar was on the front foot as geopolitical worries, including tense Russia-Ukraine negotiations boosted safe-haven flows.
"I think people are still trying to digest everything going on with not only tariffs and how that could impact things but also general valuations," said Sandy Villere, portfolio manager at Villere & Co in New Orleans. "We feel like the market is pretty expensive."
"You've got not only the tariff situation, which I think is going to be more sabre-rattling and negotiating than anything long-term," Villere said.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.29 per cent after touching a three-month high earlier in the session.
Chinese tech stocks have been on a tear recently as the emergence of AI startup DeepSeek and a meeting between Xi Jinping and business leaders in the sector lift sentiment.
"Green shoots are emerging in China’s economy and DeepSeek is injecting a shot of adrenaline into the sector," said Thomas Rupf, co-head Singapore and CIO Asia at VP Bank.
"While trade risks persist, tech optimism remains strong as the prospect of low-cost AI applications drives a reassessment of growth potential."
Hong Kong's Hang Seng Index fell 0.3 per cent as investors pocketed some profits. The index has risen over 13 per cent so far in 2025, jostling with Germany's DAX index for best-performing market in the world.
The New Zealand dollar fell 0.35 per cent after the country's central bank flagged a steeper trajectory for future rate reductions following a 50 basis-point cut to 3.75 per cent today.
The Australian dollar eased 0.11 per cent a day after the central bank delivered its first rate cut since 2020, but cautioned about the prospects for further easing.
— Reuters
