Asian Markets Jitter as Trump Sets August Tariff Deadline, Wall Street Slides Amid Global Trade Tensions

Global financial markets are on edge as United States President Donald Trump escalates trade tensions by writing to 14 countries, including Japan, South Korea, Malaysia, and South Africa, informing them of significant tariff hikes effective August 1. The move follows a 90-day grace period started in April, which was supposed to allow time for the inking of new trade agreements. With only two agreements signed so far, the looming deadline has again fueled fears of an intensified trade war.

Wall Street reacted sharply, with the S&P 500, Dow Jones, and Nasdaq all falling nearly 1% on Monday. The largest loser was Tesla, which tumbled over 6% as Elon Musk come under fresh political pressure from Trump. In Asia, markets reacted mixed. Japan's Nikkei and South Korea's KOSPI made slight gains on the back of hopes for more talks. But overall uncertainty weighed on investor sentiment across the region.

Trump's tariff letters detailed 25% tariffs on imports from close allies, invoking long-standing trade deficits. He also threatened an additional 10% levy on nations in accordance with the BRICS bloc, raising geopolitical stakes. While the European Union was spared and is near a separate deal, other nations are scrambling to renegotiate terms before the August deadline.

Oil prices dropped after a surprise OPEC+ decision to increase production, contributing to market volatility. The U.S. dollar crept higher, and gold was flat as investors sought safe havens.

With the August 1 deadline drawing near, markets are bracing for higher volatility. Specialists have warned that the failure to achieve broader trade agreements would affect global supply chains, trigger inflation, and slow economic growth.