JAKARTA – Asian stock markets experienced a sharp correction after Donald Trump, the President of the United States (US), announced a universal import tariff policy of 10% for all countries, with additional tariffs varying up to over 50% for China and reaching 32% for Indonesia.

Early this morning, Thursday (3/4), at 04:00 WIB, Trump stated that the new tariffs were implemented in response to the US trade balance deficit with more than 60 countries. This announcement shocked the markets as it was far more aggressive than analysts had anticipated, marking a more intense Trade War 2.0.

The impact on Asian stock markets was immediately visible today:

• Japan's Nikkei 225 Index fell by 2.77%,

• Shanghai Composite Index dropped by 0.2%,

• Hong Kong's Hang Seng weakened by 1.57%,

• South Korea's Kospi declined by 0.76%, driven by the 32% import tariff threatening the semiconductor and manufacturing sectors,

• India's BSE Sensex briefly fell by 0.29%,

• Vietnam's Ho Chi Minh Index recorded the largest drop of 6.63% after being hit with a 46% tariff, making it one of the hardest-hit in Southeast Asia.

In Southeast Asia, Indonesia also found itself in a vulnerable position with the new 32% tariff, while Singapore's Straits Times Index remained relatively stable with only a 0.03% decline, as it avoided high tariffs.

In addition to stock markets, Asian currencies also weakened. The Thai Baht experienced the steepest decline of 0.64%, followed by the South Korean Won at 0.55%, the Malaysian Ringgit at 0.55%, the offshore Yuan at 0.41%, the Singapore Dollar at 0.13%, and the Hong Kong Dollar at 0.03%.

The offshore Rupiah also came under pressure, weakening by 0.16% to IDR 16,760/US$. Indonesia's domestic financial markets remain closed for the Eid holiday and will reopen on April 8, 2025. Meanwhile, the Japanese Yen strengthened sharply by 0.76% against the US Dollar. (EF/LM)