Asian Stocks Slide as Trump Tariff Fears Grow Despite China PMI Boost

Asian stock markets tumbled on Monday amid mounting fears of expanded U.S. trade tariffs under President Donald Trump. Most regional indexes posted steep losses as risk sentiment soured, despite strong economic data from China.

Investors grew wary after a Wall Street Journal report indicated Trump may unveil broader tariffs targeting key U.S. trading partners. The White House is set to introduce new reciprocal tariffs on April 2, potentially impacting sectors like semiconductors, automobiles, and pharmaceuticals. This follows last week's announcement of a 25% tariff on all foreign-made cars.

Wall Street’s sharp Friday losses, triggered by stronger-than-expected inflation data, added to the global risk-off mood. U.S. stock index futures also fell in Asian trading on Monday, further pressuring sentiment.

Japan's Nikkei 225 dropped 3.9%, South Korea’s KOSPI slid 2.6%, and the TOPIX lost 3.3%, dragged down by auto and tech stocks. AI-linked firms were particularly hard hit due to concerns over oversupply in data center infrastructure, following reports that Microsoft canceled several data center leases.

China’s Shanghai Composite and CSI 300 each declined 0.7%, while Hong Kong’s Hang Seng index fell 1.5%. Stronger-than-expected PMI data for March, reflecting gains in both manufacturing and services, failed to boost sentiment. Though the data signaled that Beijing's aggressive stimulus is taking effect, investors remained cautious amid looming U.S. tariffs.

Australia’s ASX 200 also dropped 1.6% ahead of a Reserve Bank of Australia policy decision. Several Southeast Asian markets were closed due to holidays.

Despite outperforming in recent months on stimulus optimism, Chinese stocks remain vulnerable to escalating trade tensions, which continue to weigh on Asian market performance overall.