Asian stocks mostly rise amid hopes for trade deal breakthrough

Asian stock markets mostly gained on Monday as investors looked past escalating trade tensions triggered by U.S. President Donald Trump's latest tariff threats, remaining hopeful that diplomatic agreements will be reached before the August 1 deadline.

President Trump over the weekend warned of fresh tariffs, threatening 30% duties on goods from the European Union and Mexico. This follows a series of aggressive announcements last week, including potential tariffs of 50% on copper and Brazilian imports, 35% on Canadian goods, and as much as 200% on pharmaceuticals.

While economists caution that these measures could significantly harm the global economy, markets remained relatively stable on optimism that negotiations will lead to resolutions in time.

Trump cited Mexico’s role in the illegal drug trade and the EU's trade surplus with the U.S. as justification for the proposed tariffs, throwing months of delicate negotiations with Brussels into turmoil.

Despite the setback, European Commission President Ursula von der Leyen reiterated the EU’s commitment to reaching a deal. On Sunday, the bloc delayed retaliatory tariffs on U.S. steel and aluminium, signaling a desire for diplomacy.

In May, EU officials had threatened retaliatory tariffs worth up to €100 billion ($117 billion), targeting American cars and aircraft if talks collapse. French President Emmanuel Macron supported continued dialogue but urged the EU to prepare credible countermeasures in case discussions fail.

Analysts noted the irony that Mexico and Canada — both targets of the new threats — had already signed trade agreements with the U.S. under Trump’s first administration.

Nonetheless, most Asian investors shrugged off last week’s losses in Western markets. Hong Kong, Shanghai, Sydney, Seoul, Singapore, Manila, and Jakarta all posted gains. Meanwhile, Tokyo, Wellington, and Taipei saw minor declines.

In cryptocurrency markets, Bitcoin surged to a new all-time high of $119,490.

Taylor Nugent of National Australia Bank commented, “It’s hard to say whether markets are showing resilience or complacency. With negotiations ongoing, pricing the final outcome of the tariff threats is challenging.”

Attention is also turning to the U.S. Federal Reserve, as Trump continues pressuring Fed Chair Jerome Powell to cut interest rates. On Sunday, the president said, “I hope he quits,” escalating personal criticism of Powell’s leadership.

Reports suggest Trump allies are also scrutinizing Powell over a costly renovation of the Fed’s headquarters, potentially building a case for his removal. However, analysts warn that such a move could undermine the Fed’s independence, trigger a spike in U.S. Treasury yields, and weaken the dollar.

Market Snapshot (as of 02:30 GMT):

Tokyo – Nikkei 225: Down 0.3% at 39,469.72
Hong Kong – Hang Seng Index: Up 0.1% at 24,174.34
Shanghai – Composite: Up 0.4% at 3,524.93
Euro/Dollar: Up at $1.1693 (from $1.1690)
Pound/Dollar: Down at $1.3496 (from $1.3497)
Dollar/Yen: Down at 147.01 yen (from 147.38 yen)
Euro/Pound: Up at 86.64 pence (from 86.59 pence)
WTI Crude: Up 0.1% at $68.52 per barrel
Brent Crude: Up 0.1% at $70.43 per barrel
New York – Dow Jones: Down 0.6% at 44,371.51 (close)
London – FTSE 100: Down 0.4% at 8,941.12 (close)