Markets in Japan, South Korea and Taiwan soar after the U.S. president pauses punishing tariffs. Gains in mainland China were modest as trade hostilities heat up between Washington and Beijing.
Following President Trump’s decision to pause punishing tariffs on dozens of countries, markets in Asia reacted predictably: Stocks soared in the countries that were spared.
In early trading on Thursday, benchmark indexes rose more than 9 percent in Taiwan, 8 percent in Japan and 5 percent in South Korea. All three Asian economies were among the U.S. trading partners given a 90-day reprieve from Mr. Trump’s so-called reciprocal tariffs.
While the U.S. allies won’t immediately face the 24 percent to 32 percent tariffs the Trump Administration had previously threatened, they will still be subject to a lower rate of 10 percent. That comes on top of 25 percent tariffs that Mr. Trump has imposed on goods including cars — a particular sore point for big auto exporters Japan and South Korea.
In the United States, the reversal by Mr. Trump on Wednesday sparked the biggest one-day rally of the S&P 500 since October 2008, when stocks soared as investors anticipated central bank rate cuts in the wake of the global financial crisis.
Huge Gains and Losses in One Week
Modest gains or losses are the most common outcomes on S&P 500 trading days. But since last Thursday the index has had two steep drops and one of its biggest gains since 2000.
Distribution of daily S&P 500 movements
since 2000
800 days
600
400
April 4
–6.0%
April 3
–4.8%
April 9
+9.5%
200
–11%
–7%
–3%
0%
+3%
+7%
+11%
LOSSES
GAINS
Distribution of daily S&P 500 movements since 2000
800 days
600
400
April 4
–6.0%
April 3
–4.8%
April 9
+9.5%
200
–11%
–7%
–3%
0%
+3%
+7%
+11%
LOSSES
GAINS
On Wednesday Mr. Trump did not walk back the new tariffs, exceeding 100 percent, that he has put on China since taking office in January.
Washington and Beijing have traded multiple rounds of tariffs, pushing the cost of their trade with one another to extraordinary levels. China leveled the latest salvo on Wednesday, bringing its across-the-board levies on American imports to 84 percent.
President Trump said on Wednesday that he did not think he would need to raise tariffs on China higher than 125 percent and that he expected Xi Jinping, China’s leader, to reach out about a deal. “I can’t imagine it. I don’t think we’ll have to do it more,” he said of additional tariffs on China. “No, I don’t see that.”
In trading on Thursday, stocks listed in Hong Kong gained around 4 percent, while those listed in Shanghai gained about 1 percent.
Over the past week, Mr. Trump’s trade broadsides have sent markets into a tailspin and threatened to upend global trade. Even after the rally on Wednesday, the S&P 500 remains roughly 12 percent below its February peak. It was also the index’s worst start to a presidential term since the dot-com bubble burst at the start of 2001.
In Asia, stock benchmarks have fallen more than 12 percent in Japan, and more than 16 percent in Taiwan this year. South Korea’s Kospi index has remained roughly flat.