Tariff-Filled U.S.-China Deal Rattles Asia-Pacific Markets

Asia-Pacific markets trade mixed as the U.S.-China deal imposes 55% tariffs, raising investor concerns and fueling global market uncertainty.

Asia-Pacific markets closed on a mixed note Thursday as investors digested conflicting signals from Washington over a new U.S.-China trade agreement that includes steep tariffs, reigniting concerns over global trade stability.

In Tokyo, the Nikkei 225 fell 0.61% while the broader Topix index shed 0.24%. Hong Kong’s Hang Seng slipped 0.46%, and Australia’s ASX 200 edged down 0.08%. However, mainland China’s Shanghai Composite managed to rise slightly by 0.07%, and South Korea’s Kospi and Kosdaq gained 0.83% and 0.79% respectively. India’s Nifty 50 opened marginally higher by 0.11%.

The market turbulence came after U.S. President Donald Trump declared a trade deal with China “done,” but added a significant caveat: the U.S. will retain a 55% tariff on Chinese imports. Commerce Secretary Howard Lutnick confirmed the figure, adding weight to fears that punitive trade measures may now be a long-term fixture.

“WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%,” Trump posted on social media, asserting that the U.S. emerged as the clear winner in the deal. He also touted concessions from Beijing, including supplies of rare earth materials and broader acceptance of Chinese students in U.S. institutions.

Tariff-Filled U.S.-China Deal Rattles Asia-Pacific Markets

Despite the positive spin, global markets reacted with caution. “The tone and structure of the deal suggest more confrontation ahead,” said Ed Yardeni of Yardeni Research. “Markets were likely unsettled by not only the tariff permanence but also Trump’s remarks throwing fresh doubt on a nuclear accord with Iran.”

Wall Street futures also dipped on the back of the trade news and new inflation data. Futures for the S&P 500 and Nasdaq 100 dropped 0.2% each, while Dow Jones futures fell 72 points. The decline followed a surprisingly soft consumer inflation report, with May CPI rising only 0.1% and core CPI also underperforming expectations.

Commodities markets reflected investor uncertainty. Gold climbed 1.49% to $3,391.35, while silver rose 0.69% to $36.68—both benefiting from safe-haven demand. Meanwhile, oil prices edged lower, with Brent crude down 0.39% at $69.80 per barrel and WTI off 0.3% at $67.80.

Bond markets saw mixed movements, with yields on the U.S. 10-year Treasury sitting at 4.405%. U.K. and German 10-year yields stood at 4.5490% and 2.5385%, respectively.

Economists at ANZ warned that the risk of tariffs becoming entrenched is likely to weigh on equities and undermine business sentiment globally. “This is a deal, but it’s a costly one,” said an ANZ note.

Investors now turn their attention to upcoming U.S. economic indicators. At 12:30 AM GMT, markets will receive the latest readings on Core Producer Price Index (PPI), PPI, and weekly unemployment claims—data that could further shape expectations for the Federal Reserve’s next move.

As the U.S.-China trade saga enters a new phase, markets appear to be bracing for continued volatility, with little clarity on whether this “deal” will bring lasting stability or renewed tension.

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