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Stocks are on tenterhooks, as Trump's tariff plans approach

Asian stocks stumbled on Wednesday as investors worried about escalating global trade wars awaited the details of U.S. president Donald Trump's proposed tariffs.

In recent weeks, investors have been focused on the new round reciprocal levies which the White House will announce at 2000 GMT on Wednesday. These are expected to go into effect immediately following the announcement.

Trump has already imposed duties on autos, aluminium and steel, as well as increased duties on all Chinese goods. This has rattled the markets, with fears growing that a full-blown global trade war may trigger a sharp economic slowdown.

Asian stocks dropped in the early morning trading after a turbulent session in the United States. Japan's Nikkei fell 0.3%, while South Korea's benchmark was down 0.57%.

Wall Street's benchmark S&P and Nasdaq both ended the session higher, after earlier losing ground. The Dow ended a little lower.

Chris Weston is the head of Pepperstone's research. He said: "We are experiencing a trading environment that is in a state if chop. Market players are adjusting their exposures at the margins and don't want to commit."

The blue-chip index rose 0.14%. Hong Kong's Hang Seng fell 0.3% in early trading.

Vasu Menon is the managing director for investment strategy at OCBC. He said: "Trump called April 2, 'Liberation Day,' but it's unlikely that investors will be truly liberated from tariff uncertainty."

This possibility will likely continue to make investors nervous.

Investors are becoming increasingly concerned by signs such as rising prices, a slowing economy and cracks on the labour market.

The data showed that U.S. manufacturing shrank in March, after two months of growth. A measure of inflation in the factory gates jumped to its highest level in almost three years due to rising concern over tariffs on imported products.

In a recent note, ING economists stated that "Tariffs were meant to reinvigorate U.S. Manufacturing, but they are more concerned about the impact on supply chains, and what it means for foreign retaliation, despite signs of a cooling in the domestic economy."

The Labour Department reported on Tuesday that U.S. employment opportunities fell by 194,000 in February to 7.568 millions as tariff uncertainty dampened labour demand.

The yield on the 10-year Treasury benchmark note in the United States was 4.189% during Asian hours, having fallen to 4.133% Tuesday. This is its lowest level since February 4.

Most currency pairs traded in tight ranges. The euro remained at $1.079125 while the sterling traded at $1.29125. The yen was slightly weaker, at 149.83 dollars per yen.

But the focus will be on tariff details. This is especially true after a report in the media said that Trump's advisers were considering a plan to raise duties by around 20% on products from almost every country rather than target certain countries or specific products.

"We are heading into Trump's time to shine, with many already having deleveraged in order to run as neutral or flat a position they can on equity, USD (dollar), and Treasuries." Pepperstone's Weston stated

Gold, which is seen as a safe haven against economic and political turmoil, was well-priced at $3,132.43 an ounce. This price, while up by 0.7%, was still just below the previous session's record high.

(source: Reuters)