Tech stocks in South Korea, Taiwan fall after new U.S. tariffs
Uncertainty persists as U.S.-China trade deal unresolved
Investors expect higher average tariffs even after more deals
By Gregor Stuart Hunter, Rae Wee and Shashwat Chauhan
Aug 1 (Reuters) - U.S. President Donald Trump’s Friday tariff deadline brought little reprieve for markets, with stocks around the world taking a hit as investors fretted over the cost of disrupting global supply chains and the outcome of talks with China.
For traders inured to Trump’s repeated threats, his follow-through on blanket tariffs for dozens of nations may be a wake-up call, as the deadline to strike trade deals with the United States expired and new levies arrived right on cue.
Trump’s new tariff rates include a 35% duty on many goods from Canada, 50% for Brazil, 25% for India, 20% for Taiwan and 39% for Switzerland.
The new export duties are below the “Liberation Day” tariffs unveiled on April 2, but several countries are still in talks with the United States, fueling uncertainty.
Investors are also still on edge over whether the United States and China will be able to clinch a deal to avert a tariff of 55% before their trade truce ends on August 12.
“The macro risks remain in place – while nowhere near on the scale of April, the market has acknowledged that tariffs are going up materially, leading to challenges for global growth,” said Geoff Yu, EMEA market strategist at BNY.
The move is a reminder that a U.S. president who has consistently advocated protectionist policies for decades now has the power to force higher costs on companies across complex global supply chains that took just as long to build.
The MSCI All Country World Index (.MIWD00000PUS) is up 28.6% from April lows, but has fallen for the past six consecutive sessions.
Trump hit Taiwan with a tariff of 20% on Friday, higher than the 15% the United States agreed with Japan and South Korea, though the government said it would continue to negotiate for a lower duty. Taiwan and South Korea are critical links in the supply chain of advanced logic chips and memory chips, respectively.
Stocks in Asia Pacific’s biggest tech hardware producers suffered the brunt of the selling, with South Korea’s Kospi index (.KS11) dropping as much as 3.8% and Taiwan’s benchmark index (.TWII) down as much as 1.6% before recovering.
Taiwan Semiconductor Manufacturing Company (2330.TW) shed 1.7%, as its supplier Tokyo Electron’s shares (8035.T) plunged 18% after the company cut its profit forecasts by a fifth.
Tech shares across the globe felt the heat too, with Europe’s tech index (.SX8P) dropping 2.3%. Shares of the world’s biggest supplier of computer chip-making equipment, ASML (ASML.AS) , were down 2.6%.
The tech-heavy Nasdaq index (.IXIC) shed 1.6%, easing from record highs.
The sector shrugged off better-than-expected earnings from Apple (AAPL.O) and focused instead on a warning from CEO Tim Cook that U.S. tariffs would add $1.1 billion in costs over the period.
Weaker-than-expected results from Amazon.com’s (AMZN.O) cloud-computing unit added to the gloom.
Just in the last two weeks of July, global companies have reported a combined loss of $10.8 billion to $12 billion from tariffs. Automotive, aerospace and pharmaceutical sectors are among the worst hit.
The average tariff rate is going from about 2.5% to 15.3%, said Prashant Bhayani, chief investment officer for Asia at BNP Paribas Wealth Management.
“That’s a steep change,” he said. “But if everyone’s getting tariffed, it’s more about that relative (level), because that affects how much you get, and perhaps relative to your competitors.”
The latest tariffs also rattled currency markets, with the Swiss franc (CHF=D3) hitting a six-week low against the dollar at one point, after Trump set a 39% tariff on Swiss imports, one of the highest tariff rates in his global trade reset.
The dollar (=USD) , however, fell broadly after data showed U.S. job growth slowed much more than expected in July.
The South Korean won (KRW=KFTC) weakened past 1,400 per dollar for the first time since May 19 and the Taiwan dollar (TWD=TP) breached 30 against the greenback for the first time since June 4.
But even after the tariff deadline, some market participants said they expected agreements to remain in flux.
“It is tempting to think that a large part of the tariff uncertainty is behind us now, but we remain cautious,” said Wei Yao, head of research, Asia Pacific, at Societe Generale.
“Deals are far from finalized. The framework agreements reached so far are very vague on details, and in some cases, the US has a different interpretation from the other side.”
Here we go again?
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Atomised
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ASML

Global markets are reeling from new U.S. tariffs, with tech stocks in South Korea and Taiwan particularly affected. President Trump's tariffs include significant duties on goods from various countries, raising concerns about global supply chains and economic growth. The MSCI All Country World Index has seen a decline, and major tech companies like Taiwan Semiconductor and ASML have reported losses. The average tariff rate is expected to rise sharply, impacting currency markets as well. Analysts remain cautious about future trade agreements, citing ongoing uncertainties.

- U.S. President Trump's new tariffs have negatively impacted tech stocks in South Korea and Taiwan, with significant drops in their respective indices.  
- The uncertainty surrounding U.S.-China trade negotiations continues, as investors anticipate higher average tariffs despite ongoing discussions.  
- Global companies have reported substantial losses due to tariffs, with the average tariff rate increasing from 2.5% to 15.3%, affecting various sectors and currency markets.  

Investors see few winners as tariff storm lashes global markets