US tariff threat on China shakes Asian markets

Asian markets plunged in March amid renewed trade war fears. Investor sentiment collapsed globally after U.S. President Donald Trump announced an additional 10% tariff on China, prompting Beijing to vow retaliation. This escalated concerns that trade tensions would move from threats to actual implementation.

On the 28th, South Korea’s KOSPI index plummeted 3.39% to close at 2,532.78, breaking below the 2,600 threshold for the first time in 10 trading days. The KOSDAQ index also declined 3.49% to 743.96, with foreign and institutional investors offloading 1.55 trillion won and 618.1 billion won, respectively. As demand for safe-haven assets surged, the Korean won weakened sharply, with the won-dollar exchange rate soaring by 20.4 won to 1,463.4 won per dollar.

The market turmoil was not limited to South Korea. Major Asian markets also suffered heavy losses, marking what was dubbed a "Black Friday." Japan’s Nikkei 225 dropped 2.88%, China’s Shanghai Composite fell 1.87%, Hong Kong’s Hang Seng declined 3.21%, and Taiwan’s Taiex slipped 1.49%.

The sell-off was triggered by Trump's overnight announcement that, starting March 4, the U.S. would impose a long-delayed 25% tariff on Canada and Mexico while adding a 10% tariff on Chinese imports. Further signs of a U.S. economic slowdown and growing pessimism over artificial intelligence (AI) stocks, led by Nvidia, exacerbated market jitters.

In response to Trump's remarks, U.S. markets also tumbled. The Nasdaq dropped 2.78%, while Nvidia’s stock plunged 8.5%, erasing $300 billion in market capitalization—an amount surpassing the total market value of Samsung Electronics ($244 billion).

Asian markets were further rattled as China signaled retaliation. On the 28th, China's Ministry of Commerce warned, "If the U.S. pushes ahead with tariffs, we will take all necessary countermeasures." However, Beijing did not specify what retaliatory actions it would take.


홍석호기자 will@donga.com