(Sharecast News) - Asia-Pacific markets ended mixed on Friday as investors digested fresh trade tensions following US president Donald Trump's announcement of a 35% tariff on Canadian goods starting 1 August.
Trump also signalled broader protectionist intentions, telling NBC News he plans to impose blanket tariffs of 15% or 20% on most of America's trading partners.
"Donald Trump took to television to add new tension to his ongoing trade conflicts, disrupting Wall Street's recent rally to record levels," commented TickMill market strategy partner Patrick Munnelly.
"Trump announced that he would send out tariff letters to Canada and Europe 'today or tomorrow', and he proposed that the overall tariff rates on other nations that do not receive a letter could be increased to 15% or 20%, up from the existing 10% baseline.
"Shortly after, he shared the letter to Canada on social media, stating that a 35% tariff would be applied to all Canadian goods starting 1 August."
However, Munnelly noted that market concerns eased somewhat when an administration official indicated that an exemption was likely for items included under the United States-Mexico-Canada Agreement.
"Trump has announced that the EU will also receive a letter, leading investors to believe that trade negotiations between the two are not progressing well.
"EU officials had previously indicated that their goal was to finalise a deal before 1 August.
"The economic data releases in both Europe and the US are limited on Friday, prompting investors to prepare for the upcoming second-quarter corporate earnings in the US next week, which will help assess the effects of Trump's tariffs."
Regional markets finish the week in a mixed state
In Japan, the Nikkei 225 slipped 0.19% to 39,569.68, led lower by steep declines in major stocks including Fast Retailing, down 6.93%, and Japan Steel Works, which fell 7.67%.
"In a troubling indication of future developments, Fast Retailing, the parent company of Uniqlo, cautioned that tariffs will significantly impact its US business later this year, and the company intends to increase prices to mitigate the effects," Patrick Munnelly noted.
LY Corporation meanwhile shed 1.06%.
However, the broader Topix index gained 0.39% in Tokyo to close at 2,823.24.
Chinese equities were broadly firmer, with the Shanghai Composite inching up 0.01% to 3,510.18, supported by sharp gains in newly listed firms.
HOB Biotech Group surged 20%, while Bonree Data Technology and Swancor Advanced Materials each gained nearly 20%.
The Shenzhen Component rose 0.61% to 10,696.10.
Hong Kong's Hang Seng Index fell 0.46% to 24,139.57, weighed down by declines in property and consumer names.
New World Developments dropped 2.46%, China Resources Mixc lost 2.33%, and ANTA Sports Products slipped 2.32%.
South Korea's Kospi 100 dipped 0.04% to 3,197.29.
KakaoPay sank 8.19%, while Hanjinkal and Hanwha Techwin fell 5.69% and 5.51% respectively.
The S&P/ASX 200 in Australia declined 0.11% to 8,580.10, with real estate and education stocks under pressure.
Growthpoint Properties Australia slid 3.31%, IDP Education dropped 3.28%, and G8 Education was down 3.23%.
New Zealand's S&P/NZX 50 was the region's worst performer, falling 0.58% to 12,686.68.
KMD Brands fell 3.7%, while Summerset Group Holdings and Tourism Holdings declined 3.08% and 2.84% respectively.
In currency markets, the dollar rose against its regional peers, strengthening 0.49% on the yen to trade at JPY 149.97, as it gained 0.24% against the Aussie to AUD 1.5215, and rose 0.39% on the Kiwi, changing hands at NZD 1.6636.
Oil prices were little changed, with Brent crude futures holding steady on ICE at $68.64 per barrel, while the NYMEX quote for West Texas Intermediate edged up 0.09% to $66.63.
NZ manufacturing sector still in contraction, Trump makes yet another tariff announcement
In economic news, New Zealand's manufacturing sector showed signs of improvement in June, although it remained in contraction.
The BNZ-BusinessNZ performance of manufacturing index (PMI) rose to 48.8 from May's 47.4, marking the highest level in four months but still below the 50.0 threshold that separates expansion from contraction.
New orders was the only sub-index to break into expansion, which climbed to 51.2, suggesting some optimism for future demand.
Production edged up to 48.6 and employment to 47.9, while finished stocks and deliveries fell to 46.9 and 47.7 respectively.
Respondents cited falling construction activity, high input costs, global instability and ongoing supply chain issues as key pressures.
Meanwhile, trade tensions between the US and Canada escalated after US president Donald Trump announced a 35% tariff on Canadian imports, effective 1 August.
In a letter addressed to Canadian prime minister Mark Carney and posted on Truth Social, Trump accused Ottawa of retaliating instead of cooperating.
He linked the new duties in part to the flow of fentanyl, stating that the US might consider adjusting the tariffs if Canada worked to curb the drug's entry.
Trump's claims around the flow of the opioid are not backed up by hard data, however.
According to US Customs and Border Protection data, just 59 pounds of fentanyl was seized at the Canadian border between 2022 and 2024, compared to 61,900 pounds at the Mexican border.
Seizures of fentanyl at the Canadian border totalled less than 0.1% of total US seizures of the drug.
Trump also warned that any increase in Canadian tariffs would be matched and added to the new 35% rate.
Reporting by Josh White for Sharecast.com.
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