Tue Jan 21 06:28:29 UTC 2025: ## Trump’s Tariff Threats Shake Markets, Asia-Pacific Sees Modest Gains

**Hong Kong, January 22, 2025** – Asia-Pacific stock markets experienced modest gains on Tuesday despite President Donald Trump’s announcement of potential new tariffs on Mexico and Canada. While markets initially showed some upward movement following Trump’s inaugural address promises of a “golden age” for America, including trade reforms, tax cuts, and deregulation, the subsequent threat of tariffs dampened investor enthusiasm.

Trump stated his intention to impose a 25% tariff on both Mexico and Canada, citing concerns about illegal immigration and fentanyl trafficking. He also hinted at further tariffs on China, contingent on negotiations surrounding TikTok, calling a blockage of a deal a “hostile act.” While he clarified that a universal tariff on all imports is not yet in place, the announcement fueled concerns about increased trade uncertainty.

Despite the threat of increased tariffs, Hong Kong’s Hang Seng rose 1%, Japan’s Nikkei 225 gained 0.1%, South Korea’s Kospi increased by 0.2%, and Australia’s ASX 200 climbed approximately 0.6%. The dollar also strengthened against the pound and the euro.

Market analysts expressed apprehension about the implications of Trump’s actions. Tim Waterer, chief market analyst at KCM Trade, noted that the explicit details of Trump’s tariff agenda negatively impacted market sentiment. Charu Chanana, chief investment strategist at Saxo Bank, warned of increased market volatility, stating that Trump’s return to the White House reintroduces an element of unpredictability. The US markets were closed on Monday for the Martin Luther King Jr. Day holiday.

While Trump’s agenda holds the potential for increased corporate profits, economists have raised concerns about potential inflation and subsequent interest rate hikes by the Federal Reserve. The President’s plans also include the creation of an “External Revenue Service” to manage tariffs and revenues from foreign sources. The long-term impact of Trump’s trade policies on both the US and global economies remains to be seen.

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