BY WAYNE COLE
SYDNEY — Asian share markets and the dollar made a soft start on Monday as US-China trade tensions continued to simmer, while investors turned defensive ahead of key US jobs data and a widely expected cut in European interest rates.
There was little obvious reaction to President Donald Trump’s threat late Friday to double tariffs on imported steel and aluminium to 50 percent, beginning on June 4, a sudden twist that drew the ire of European Union negotiators.
Speaking on Sunday, Treasury Secretary Scott Bessent said Trump would soon speak with Chinese President Xi Jinping to iron out a dispute over critical minerals.
Beijing then forcefully rejected Trump’s trade criticism, suggesting a call might be some time coming.
White House officials also continued to play down a court ruling that Trump had overstepped his authority by imposing across-the-board duties on imports from US trading partners.
“The court ruling will complicate the path ahead on trade policy, but there remains an ample set of provisions available to the administration to deliver its desired results,” said Bruce Kasman, chief economist at JPMorgan.
“There is a commitment to maintaining a minimum US tariff rate of at least 10 percent and imposing further sector tariff increases,” he added. “An increase in Asean to discourage transhipment looks likely, and the bias for higher tariffs on US-EU trade persists.”
Markets will be particularly interested to see if Trump goes ahead with the 50 percent tariff on Wednesday, or backs off as he has done so often before.
In the meantime, caution reigned and MSCI’s broadest index of Asia-Pacific shares outside Japan went flat. Japan’s Nikkei fell 1.4 percent, while Hong Kong dropped 2.5 percent.
South Korean stocks edged up 0.2 percent on hopes a snap presidential election on Tuesday would deliver a clear winner.
