HONG KONG: Asian markets fell again on Monday as the fallout from Donald Trump's proposed steel and aluminium tariffs fanned fears of a global trade war.
Equities went into a tailspin last week after the tycoon unveiled his plans for the controversial levies. While US investors ended Friday on a slightly positive note, there is still the prospect of more volatility to come.
Trump ramped up his rhetoric at the weekend, tweeting that "Our friends and enemies have taken advantage of the US for many years", before adding "Sorry, it's time for a change!"
The move, part of the president's "America First" protectionist drive, was met with fury across the world with officials from Beijing to Brussels raising concerns.
"Uncertainty has lifted materially, folks, as countries react to the tariffs and a trade war and retaliatory measures loom as a real possibility unless President Trump finds a way to step back," said Greg McKenna, chief market strategist at AxiTrader.
Hong Kong led losses, falling more than two percent, while Tokyo finished 0.7 percent lower.
But Shanghai edged up 0.1 percent, with eyes on the start of China's annual rubber-stamp parliament. The legislature began its most significant meeting for a generation, preparing to offer Xi Jinping a lifetime mandate to rule the world's number two economy.
- Seeds of destruction -
Premier Li Keqiang set a 2018 economic growth target at "around 6.5 percent", in line with expectations but lower than the 6.9 percent increase registered last year.
Sydney lost 0.6 percent and Seoul slipped 1.1 percent while Singapore was off 0.8 percent and Manila gave up 1.2 percent. There were also losses in Taipei, Wellington, Jakarta and Bangkok.
The dollar came under further pressure on worries about a trade war, with the safe-haven yen extending last week's gains -- helped by comments from the head of the Bank of Japan last week suggesting crisis-era stimulus could be scaled back from next year.
Stephen Innes, head of Asia-Pacific trading at OANDA, said: "Trump is carrying the seeds of the dollar's destruction.
"The economic fallout from trade duties would result in a toxic elixir of lower domestic growth and higher inflation, neither of which inspires investors' confidence in the dollar."
The euro also got support from news that German Chancellor Angela Merkel would form a new government, ending months of uncertainty in Europe's biggest economy, though Italy was on course for a hung parliament after a general election at the weekend.
In early European trade London fell 0.1 percent, Paris dropped 0.4 percent and Frankfurt shed 0.5 percent.
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