Trump's Tariff Hikes Impact Global Markets

U.S. President Donald Trump's announcement of sweeping tariff hikes on Chinese products has led to significant market reactions, with Chinese stocks in Hong Kong sliding 2.6% before partially recovering, and the yuan weakening. The tariffs have also impacted Southeast Asian currencies, with the Thai baht, Malaysian ringgit, and South Korean won all declining. The potential for a trade war has increased market volatility, with the S&P 500 dropping more than 4% in 2025 amid fears of retaliatory measures from China and other trade partners. Despite these tensions, Hong Kong stocks showed resilience, reversing early losses by midday on Wednesday, supported by positive manufacturing data from China. Chinese biotechnology stocks have rallied due to strong earnings, highlighting a defensive shift among investors ahead of the tariffs. However, uncertainty remains as markets await the full details of Trump's tariff plans, which could further strain China's manufacturing sector and broader export-driven economy.