Asian Shares Slip After Trump's Tariff Threats

(RTTNews) - Asian stocks fell on Tuesday as Fed independence fears resurfaced and investors awaited Nvidia results amid hopes it can soothe fears about AI spending.

Trade tensions also kept investors on edge, with U.S. President Donald Trump threatening 200 percent tariffs on China if Beijing does not export rare-earth magnets to the U.S.

At the Oval Office on Monday, Trump spoke of Washington's strength in its standoff with Beijing and warned that if he played the "incredible cards" at his disposal, it would "destroy China."

"We are going to have a great relationship with China... They have some cards. We have incredible cards, but I don't want to play those cards. If I play those cards, that will destroy China. I am not going to play those cards," he said.

China's Shanghai Composite index dipped 0.39 percent to 3,868.38, after having hit a 10-year high the previous day driven by liquidity.

Hong Kong's Hang Seng index fell 1.18 percent to 25,524.92, snapping a two-day rally amid Trump's tariff threats.

Japanese markets fell sharply while the yen gained ground on Fed independence fears after Trump took the unprecedented action of removing Federal Reserve Governor Lisa Cook following allegations that she falsified mortgage documents.

The Nikkei average closed 0.97 percent lower at 42,394.40, snapping a two-session winning run and hitting its lowest close since August 8.

The broader Topix index slipped 1.08 percent to 3,071.99. Toyota Motor gave up 1.4 percent and Honda Motor fell 1.7 percent.

Nissan Motor tumbled 6.3 percent after it has fallen out of the world's top 10 automakers by sales for the first time, according to Nikkei Asia.

Seoul stocks snapped a three-day winning streak after Trump said a 15 percent tariff on imports from South Korea will remain unchanged. The Kospi average fell 0.95 percent to 3,179.36.

Korean Air Lines lost 4.1 percent after it announced plans to order more than 100 Boeing Co. jets. Shipbuilder Hanwha Ocean slumped 6.2 percent and HD Hyundai Heavy Industries declined 3.8 percent.

Australian markets ended lower as the minutes of RBA's August monetary policy meeting showed that the pace of future easing is likely to hinge on economic data.

The benchmark S&P/ASX 200 dropped 0.41 percent to 8,935.60, with miners pacing the decliners. The broader All Ordinaries index settled 0.41 percent lower at 9,207.30.

Iron ore major Fortescue tumbled 3.9 percent after reporting a 41 percent drop in annual net profit. On the contrary, grocer Coles surged 8.5 percent after flagging sustained strength in sales at its core supermarkets.

Across the Tasman, New Zealand's benchmark S&P/NZX 50 index fell 0.93 percent to 12,957.98, giving back gains from the previous session as Trump claimed the United States holds overwhelming leverage over China in their trade dispute.

Gold touched a two-week high in Asian trade as the dollar weakened ahead of a looming key U.S. inflation report. Oil prices declined after surging nearly 2 percent in the previous session.

U.S. stocks fell overnight as investors took profits after Friday's big rally on Fed Chair Jerome Powell's dovish surprise.

The Dow shed 0.8 percent, the S&P 500 gave up 0.4 percent and the tech-heavy Nasdaq Composite eased 0.2 percent.