The departure of economic adviser Gary Cohn sparked renewed worries Trump may go ahead with his proposed import tariffs on steel and aluminium.
SINGAPORE: most Southeast Asian stock markets declined on Tuesday, in line with broader Asia, as US President Donald Trump threatened new tariffs on Chinese goods in an escalating trade war between the world's top two economies.
Trump warned on Monday that Washington would impose a further 10 percent tariff on $200 billion of Chinese goods after Beijing's decision to raise tariffs on $50 billion in U.S. goods, which was in retaliation for U.S. tariffs announced on
Friday.
Trump said if China increases its tariffs again in response to the latest U.S. move, "we will meet that action by pursuing additional tariffs on another $200 billion of goods.
"This is causing a little bit of uncertainty in the market. It is very worrisome for investors and they are staying on the sidelines and avoiding risky assets such as equities," said Lexter Azurin, a senior equity analyst at Manila-based AB Capital Securities.
MSCI's broadest index of Asia-Pacific shares outside Japan hit its lowest since February as safe-haven assets such as gold and the Japanese yen gained.
Philippine shares fell as much as 2.2 percent to their lowest since March 27, 2017, weighed down by industrials and financials. SM Investments Corp declined 3.2 percent, while BDO Unibank Inc shed 2.9 percent.
A slim majority of economists believe the Philippine central bank will raise interest rates on Wednesday, but opinions are sharply divided, with the weak peso likely to be the factor that will tilt the scale.
Thai shares fell nearly 1 percent to their lowest since Sept. 28, 2017 and were on track for a fifth straight session of decline.
On Wednesday, the central bank is expected to leave its policy interest rate near a record low to encourage more broadly-based economic growth at a time when inflation remains low, according to all 21 economists surveyed in a Reuters Poll.
Vietnam shares fell 2.8 percent to their lowest in nearly three weeks, with Petrovietnam Gas Joint Stock Corp declining to its lowest in six months, while Vietnam Technological and Commercial Joint Stock Bank dropped 6.8 percent.
Malaysian shares were down for a seventh straight session, while Singapore shares rose on the back of gains in financials.
Indonesian financial markets are closed through Tuesday for Eid Al-Fitr. - Reuters
Limited time offer:
Just RM5 per month.
