Asian shares plunge as US markets reverse gains, Japan’s Nikkei down 5.6%: 10 things to know

NEW DELHI: Asian markets on Friday slumped with Tokyo’s Nikkei 225 nosediving over 5.6% in early trade, as investors reacted to mounting fears that the US-China trade war is spiralling out of control.
The fresh jitters come a day after Wall Street erased much of its historic rally, triggered earlier in the week by President Donald Trump’s temporary suspension of tariffs on several allies—excluding China.
By late morning, Japan’s benchmark index was down 4.7% at 32,969.95. South Korea’s Kospi shed 1.6% while Australia’s ASX 200 lost 2.1%. The yen climbed sharply, with the dollar falling to 143.48 yen from about 146 yen on Thursday, a clear signal of investors rushing to safer assets. Gold also touched a new high as risk-off sentiment spread.
The renewed sell-off was sparked after the White House clarified that Chinese imports will now face a 145% tariff rate, once earlier layers are included. Beijing swiftly responded with 84% tariffs on US goods and announced plans to reduce the number of Hollywood films imported—shaking stocks like Warner Bros. Discovery, which plunged 12.5%.

Japan

China

South Korea

United States

Europe

Wall Street wipes out historic gains

US markets suffered their worst single-day drop in months on Thursday, effectively erasing the optimism sparked by earlier trade pauses. The S&P 500 slid 3.5%, closing at 5,268.05, while the Nasdaq suffered an even steeper fall of 4.3%. The Dow Jones tumbled 2.5%, shedding over 1,000 points to end at 39,593.66. The selloff was broad-based, with tech, financials, and consumer stocks all taking heavy hits. The plunge reflected deepening investor anxiety over rising tariffs, recession risks, and the possibility of a global slowdown.

Trump doubles down on China tariffs

President Donald Trump confirmed on Thursday that his administration will move forward with a massive 145% tariff package on Chinese goods, significantly higher than the 125% figure floated earlier. While the White House recently paused tariffs on allies like the EU, Japan, and the UK, Trump framed the China move as a “necessary correction” to decades of unfair trade practices. “We’re bringing the jobs back. It’s tough love, but we’ll win,” he told reporters. Businesses and economists warned the steep duties could raise consumer prices and disrupt supply chains, particularly in electronics, automotive, and machinery sectors.

China hits back with 84% tariffs, cuts Hollywood imports

Beijing responded swiftly to Trump’s tariff escalation, slapping 84% tariffs on key American exports including agricultural goods, electronics, and semiconductors. The Chinese government also announced a sharp reduction in the number of American films allowed to screen in China, a move that dealt a heavy blow to Hollywood. Shares of Warner Bros. Discovery plunged 12.5%, while Disney fell 6.8% amid fears of long-term market access losses. Analysts said the film industry, already grappling with streaming disruptions, could face major revenue hits if Chinese market access continues to narrow.

Gold at record high, oil prices slip

Gold prices hit an all-time high as nervous investors piled into safe-haven assets amid deepening market turmoil. Uncertainty over global trade, equity volatility, and weakening currencies fuelled demand for the precious metal. Meanwhile, oil prices moved in the opposite direction. US crude fell 37 cents to $59.70 a barrel, while Brent crude dipped to $63.03. Traders pointed to concerns over potential demand destruction from slowing global growth and rising tariffs.

EU pauses retaliation, but warns of ‘bazooka’

The European Union said it would suspend its planned $22.4 billion in retaliatory tariffs against the United States for 90 days, offering a diplomatic window for negotiations. However, EU officials issued a stern warning, saying they are prepared to use their newly-adopted “anti-coercion instrument” — dubbed the ‘bazooka’ — if talks collapse. This tool gives the EU sweeping powers to impose countermeasures against economic bullying. While the pause was welcomed by business groups, Brussels made it clear that its patience has limits.

Trump says turmoil is ‘cost of transition’

Amid mounting market losses and global backlash, President Trump remained defiant, describing the economic upheaval as a “transition problem” necessary to achieve long-term prosperity. “We’ve been taken advantage of for decades. This is the correction — and when it’s over, it’ll be beautiful,” Trump said. He dismissed concerns about short-term pain, insisting that the tariff strategy would ultimately boost American manufacturing and reduce reliance on China. Critics, however, argue that Trump is underestimating the ripple effects on consumers, businesses, and global stability.
(With inputs from agencies)