Asian Shares Mixed Amid Trump's Tariff Threats

(RTTNews) - Asian stocks ended mixed on Wednesday, with Chinese and Hong Kong markets falling sharply after U.S. President Donald Trump threatened tariffs on the EU and China to address trade imbalances and combat fentanyl trafficking.

Speaking to reporters at the White House, Trump reiterated his administration's plans to discuss a potential 10 percent tariff on goods imported from China starting February 1 to curb the flow of deadly drug fentanyl that is being sent from China to the U.S. via Mexico and Canada.

Meanwhile, Europe will respond to any tariffs imposed by President Donald Trump in a proportionate way, the European Union's commissioner for the economy told CNBC after Trump repeated his threat to impose tariffs on EU goods entering the United States.

The dollar held ground in Asian trade amid uncertainty about Trump's tariff plans. Gold held at two-month highs above $2,750 per ounce while oil extended declines on concerns of higher U.S. output in a market widely expected to be oversupplied this year.

China's Shanghai Composite index fell 0.89 percent to 3,213.62 on signs of rising tensions between the world's largest economies.

Hong Kong's Hang Seng index plummeted 1.63 percent to 19,778.77, snapping a six-day winning streak on broad losses among technology companies as Trump announced a major private-sector investment aiming to "beat China" in AI.

Japanese markets rallied as Trump announced a major $500 billion AI infrastructure project in collaboration led by SoftBank, Oracle, and OpenAI. The Nikkei average jumped 1.58 percent to 39,646.25 while the broader Topix index settled 0.87 percent higher at 2,737.19.

SoftBank Group Corp shares surged 10.6 percent, while Advantest climbed 4 percent and Tokyo Electron advanced 1.7 percent.

The yen slipped from a five-week high touched on Tuesday after media reports suggested the Bank of Japan remains on track to raise interest rates on Friday.

Seoul stocks hit over two-month highs on optimism about the improved outlook for the region's tech firms. Samsung Electronics gained 1.5 percent and SK Hynix surged 3.4 percent while the Kospi average closed 1.15 percent higher at 2,547.06.

Australian markets eked out modest gains to end higher for a third straight session, with technology and uranium stocks leading the surge.

The benchmark S&P/ASX 200 rose 0.33 percent to 8,429.80 while the broader All Ordinaries index settled 0.32 percent higher at 8,680.50.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index slipped 0.12 percent to 13,037.14 after data showed annual inflation remained above the midpoint of the central bank's target band in the final three months of last year.

U.S. stocks ended on a firm note overnight as bond yields dipped on rate-cut optimism and Trump's Inauguration Day policy announcements on tariffs looked more benign than expected.

The Dow rallied 1.2 percent, the S&P 500 jumped 0.9 percent and the tech-heavy Nasdaq Composite gained 0.6 percent.