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Asian markets tumbled on Tuesday as Trump's tariffs took effect, with Japan's Nikkei 225 sliding 1.9% while the TOPIX fell 1.3%. Hong Kong's Hang Seng dropped 1.4%, Indonesia's JSX lost 1.1%, and Singapore's STI declined 0.4%. Australia's S&P/ASX 200 retreated 0.9%, while South Korea's KOSPI remained flat after returning from a holiday. The selloff mirrored Wall Street's overnight plunge following confirmation of Trump's tariff implementation.
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Trump's tariffs officially took effect at 00:00 EST Tuesday, imposing 25% duties on imports from Mexico and Canada, while doubling tariffs on Chinese goods from 10% to 20%. The measures target nearly $2.2 trillion in annual two-way trade with America's top three trading partners, citing their alleged failure to stem fentanyl flows into the U.S.
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China swiftly retaliated with countermeasures, announcing 10-15% tariffs on U.S. agricultural products including soybeans, corn, wheat, cotton, beef, and dairy, effective March 10. Beijing also placed 15 U.S. entities on an export control list and added 10 U.S. firms to its "unreliable entities" list, including gene sequencing company Illumina. China's commerce ministry criticized the U.S. for "shifting blame" over the fentanyl crisis.
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Canada announced immediate retaliatory tariffs on C$30 billion ($20.7 billion) of U.S. imports, with plans to target another C$125 billion if Trump's measures remain in place after 21 days. Prime Minister Trudeau said the tariffs "will disrupt an incredibly successful trading relationship" and violate the USMCA agreement. Ontario's premier threatened to cut off nickel shipments and electricity transmission to the U.S.
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China's "Two Sessions" political meetings commence Tuesday with the Chinese People's Political Consultative Conference, followed by the National People's Congress on Wednesday. Analysts expect Beijing to target around 5% GDP growth for 2025 and announce a budget deficit of 4% of GDP. The meetings are occurring against the backdrop of heightened trade tensions, with investors watching for stimulus measures to counter economic headwinds.
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Australian retail sales rose 0.3% in January, rebounding from December's 0.1% decline, primarily driven by increased food-related spending in cafes, restaurants, and takeaway services. The Reserve Bank of Australia released minutes from its February meeting, which revealed the central bank's decision to cut rates by 0.25 percentage points to 4.10% was based on faster-than-expected inflation decline and slower wage growth.
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Oil prices fell to near three-month lows in Asian trade as tariff concerns weighed on global growth prospects. Brent crude dropped 0.8% to $71.07 per barrel, while WTI declined to $67.64. OPEC+ indicated it will proceed with planned production increases in April, adding further downward pressure on prices.
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Bitcoin tumbled over 10% to $83,950, extending losses from the previous session as enthusiasm for Trump's cryptocurrency reserve plans faded. The digital currency had briefly rallied Monday after Trump outlined plans to include Bitcoin, Ether, Solana and Cardano in a national crypto reserve, but quickly reversed gains as details remained sparse and trade war fears intensified risk aversion. Other major cryptocurrencies also plunged, with Ether down 14% to $2,100, XRP sinking 16.1%, and Solana falling 18.9%.
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