(Bloomberg) — Asian stocks reliant on exports, ranging from Japanese carmakers to Chinese e-commerce firms, nosedived after US President Donald Trump unleashed his first wave of tariffs, signaling the beginning of a new round of global trade war.
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On Saturday, Trump ordered general tariffs of 25% on Canada and Mexico and 10% on China to come into effect on Tuesday, as well as promising a similar move later for the European Union. The MSCI Asia Pacific Index fell more than 2% in Monday trading in its biggest intraday drop in six months.
Asia investors have been bracing for impact from Trump’s pledges on sweeping trade levies, but some had anticipated tariffs might be delayed or avoided on further negotiations following his softer-than-expected tone on China. Still, corporate earnings are bound to take a hit, given many economies in the region are heavily exposed to US exports, analysts say.
The new tariffs may hurt China’s exports particularly and undermine its already-struggling economy, and in turn trigger Beijing to roll out more forceful stimulus to counter the impact.
“Macro-wise, we think the immediate channels where Asian equities might be impacted is via potentially higher US dollar,” Nomura Holdings Inc. strategists including Chetan Seth wrote in a note. “We also believe investors are likely to assess which sectors or areas in China might be more exposed to these tariffs.”
Here are some of the sectors in Asia that saw the biggest impact from Trump’s trade war:
Automakers
Japan’s biggest automakers count on North America as a crucial market and sell cars there that were manufactured or assembled in Mexico near the US border. Shares of Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. all dropped at least 5%.
South Korean automaker Kia Corp., which has a plant in Mexico, was down more than 5%.
Chinese electric-vehicle manufacturers that are seeking to expand their presence in the US market, such as Li Auto Inc. and XPeng Inc., were hit by the new tariffs. Their shares were down at least 6% in Hong Kong.
E-Commerce
Shares of Chinese e-commerce platforms such as JD.com Inc. declined as Trump’s plans extinguished a long-held tariff exemption for packages worth less than $800.
Chinese companies that produce small durable items that account for a major part of these so-called de-minimis shipments — such as clothing, accessories, home goods and electronics — also saw their stocks drop. Shares of sportswear maker Li Ning Co. and home appliance maker Haier Smart Home Co. all slumped more than 7%.
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