Key Takeaways:
The US is set to impose tariffs of as much as 12.5% on goods from 60 countries by Friday, triggering a coordinated afternoon selloff across Asia-Pacific equity markets.
The US plans to levy tariffs of 10% to 12.5% on goods from about 60 countries citing forced labor, USTR Jamieson Greer said, as the temporary 10% global tariff expires Friday and Asia-Pacific stocks reversed afternoon gains.
"We expect to see some action soon," Greer told CNBC, without specifying a timeline for the Section 301 tariffs that would cover roughly 99% of US trade. The proposed levies target countries including Mexico, Taiwan, the UK, China, Australia, Japan and Brazil.
The announcement triggered a broad afternoon reversal across Asia. Japan's Nikkei 225 erased a 1,360-point intraday surge to close 116 points lower at 66,115, while South Korea's KOSPI narrowed a 6.2% gain to just 1.2% at 6,828. Hong Kong's Hang Seng Index fell 316 points to 24,815, with turnover reaching HKD 240.97 billion. China's Shenzhen Component dropped 1.33% and the ChiNext lost 2.89%.
The escalation threatens to disrupt supply chains across semiconductors, pharmaceuticals and consumer goods — sectors representing hundreds of billions of dollars in bilateral trade. Trump separately announced a 100% tariff on imported generic drugs starting August 2028, aiming to onshore production. The 50% tariffs on Canadian goods announced Monday take effect in 30 days.
Semiconductor stocks across the region gave up sharp intraday gains. Samsung Electronics pared a 6.6% rally to close just 0.7% higher at KRW 260,800, while SK Hynix slipped from a 9.3% intraday peak into negative territory. Japan's Kioxia, which surged more than 10% intraday, closed up 5.3%.
The reversal coincided with the imminent listing of CXMT, the world's fourth-largest DRAM producer, raising concerns about potential oversupply. In China, LONGSYS reversed from a 1.8% gain to fall 6.6% to RMB 394.2, and GIGADEVICE A-shares turned from a 5.4% advance to a 0.6% decline at RMB 472.88. Its Hong Kong-listed shares dropped 4.15% to HKD 588.5. Taiwan's Nanya Technology and Winbond Electronics bucked the trend, closing limit-up.
Canadian Prime Minister Mark Carney accused the US of violating the North American trade pact with the 50% tariffs Trump announced Monday, while saying he is willing to "engage intensively to address any outstanding issues." Greer dismissed Canada's proposals as "generally for promises to discuss these issues" covering "things we already do."
South Korea's trade minister is heading to Washington as the Section 301 deadline approaches, according to local media reports. The previous US tariff escalation on Chinese goods reduced bilateral trade by tens of billions of dollars over subsequent months, according to Census Bureau data.
The forced-labor tariffs — initially proposed in June — would apply to about 60 countries and roughly 99% of US trade, Greer said. The 10% temporary global tariff that expires Friday was implemented in February after the Supreme Court struck down most of Trump's Liberation Day tariffs.
This article is for informational purposes only and does not constitute investment advice.
