SYDNEY: Stock markets slipped in Asia on Monday (Jul 7) amid confusion as United States officials flagged a delay on tariffs but failed to provide much detail on the change, while oil prices slid as OPEC+ opened the supply spigots more than expected.
The US is close to finalising several trade agreements in the coming days and will notify other countries of higher tariff rates by Jul 9, President Donald Trump said on Sunday, with the higher rates to take effect on Aug 1.
“President Trump’s going to be sending letters to some of our trading partners saying that if you don’t move things along, then on Aug 1, you will boomerang back to your Apr 2 tariff level,” US Treasury Secretary Scott Bessent told CNN.
Trump in April announced a 10 per cent base tariff rate on most countries and higher “reciprocal” rates ranging up to 50 per cent, with an original deadline of this Wednesday.
However, Trump also said levies could range in value from “maybe 60 per cent or 70 per cent”, and threatened an extra 10 per cent on countries aligning themselves with the “Anti-American policies” of the BRICS group of Brazil, Russia, India and China.
With very few actual trade deals done, analysts had always suspected the date would be pushed out, though it was still not clear if the new deadline applied to all trading partners or just some.
“This renewed escalation in trade tensions comes at a time when major trade partners, including the European Union, India and Japan, are believed to be at crucial stages of bilateral negotiations,” analysts at ANZ said in a note.
“If reciprocal tariffs are implemented in their original form or even expanded, we believe it will intensify downside risks to US growth and increase upside risks to inflation.”
Investors have grown somewhat used to the uncertainty surrounding US trade policy, and the initial market reaction was cautious. S&P 500 futures and Nasdaq futures both eased 0.3 per cent.
EUROSTOXX 50 futures eased 0.1 per cent, while FTSE futures fell 0.2 per cent and DAX futures held steady.
Japan’s Nikkei lost 0.5 per cent, while South Korean stocks went flat. MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.6 per cent, as Chinese blue chips dropped 0.5 per cent.
Singapore’s key Straits Times Index (STI) opened higher on Monday. As of 12.31pm, it rose 12.1 points or 0.3 per cent to 4,025.720.
