Asia-Pacific markets experienced a downturn on Wednesday, with investors gravitating towards safe havens following U.S. President Donald Trump’s threats of new tariffs on nations opposing the transfer of Greenland to the United States. Spot gold prices increased by more than 1%, reaching a record high of $4,813 per ounce. Hong Kong’s Hang Seng index experienced an increase of 0.42%, whereas the mainland’s CSI 300 remained unchanged, concluding at 4,723.07. Japan’s Nikkei 225 experienced a decline of 0.41%, concluding the trading day at 52,774.64, while the Topix fell by 0.99% to 3,589.7. South Korea’s Kospi increased by 0.49%, reaching 4,909.93, whereas the small-cap Kosdaq experienced a decline of 2.57%, settling at 951.29. Australia’s S&P/ASX 200 experienced a decline of 0.37%, settling at 8,782.9.
On Saturday, Trump announced that exports from eight European nations would incur a 10% tariff starting February 1, with the rate escalating to 25% by June 1 should negotiations not yield U.S. oversight of mineral-rich Greenland. He also threatened to impose 200% tariffs on French wine and champagne, following reports that President Emmanuel Macron was reluctant to participate in his proposed “Board of Peace.” Trump further criticized the U.K., labeling its plan to transfer sovereignty of the Chagos Islands, which hosts a joint U.K.-U.S. military base, as a “act of great stupidity.” He cited this move as additional justification for acquiring Greenland on national security grounds.
European leaders have characterized President Donald Trump’s recent tariff threats as “unacceptable” and are said to be considering retaliatory measures. France is reportedly advocating for the European Union to utilize its most robust economic response mechanism, known as the Anti-Coercion Instrument. U.S. stock futures experienced a modest increase during the early hours of trading in Asia, following a significant decline in major averages, marking their most challenging day in a three-month period.
Overnight in the U.S., the Dow Jones Industrial Average declined by 870.74 points, representing a decrease of 1.76%, concluding the session at 48,488.59. The S&P 500 experienced a decline of 2.06%, concluding the session at 6,796.86. The Nasdaq Composite experienced a decline of 2.39%, concluding the session at 22,954.32. All three major averages experienced their most significant decline since October. U.S. Treasury yields surged while the U.S. dollar weakened, as Trump’s warning prompted a retreat from U.S. assets.