Asia-Pacific markets extended their sell-off Monday as fears over a global trade war sparked by U.S. President Donald Trump’s tariffs fueled a risk-off mood.
Japanese markets led losses in the region in early trade. The benchmark Nikkei 225 plunged 8.03% while the broader Topix index plummeted 8.64%.
Over in South Korea, the Kospi index fell 4.34% at the open, while the small-cap Kosdaq fell 3.48%.
Australia’s S&P/ASX 200 declined 6.07% at the open. The benchmark slid into correction territory with an 11% decline since its last high in February, in its previous session.
Futures for Hong Kong’s Hang Seng index stood at 22,772 pointing to a stronger open compared to the HSI’s last close of 22,849.81.
I’m not panicked. I’m not pulling out of the equity markets. I think tariffs are terrible policy, but I also think that the U.S. economy was inflated. The U.S. economy is incredibly resilient and will bounce back fine.
Now that’s just some plain BS. The market clearly reacted to Trump’s Tariffs. The fact that his administration is trying to deflect blame instead of owning it and explaining it as a temporary pullback in the name of the longer term good (not that I agree with that, but that is the argument he should be making) is stupid on multiple levels.
Treasury Secretary Scott Bessent said Wednesday the sell-off in the stock market is due more to a sharp pullback in the biggest technology stocks instead of the protectionist policies coming from the Trump administration.
“I’m trying to be Secretary of Treasury, not a market commentator. What I would point out is that especially the Nasdaq peaked on DeepSeek day so that’s a Mag 7 problem, not a MAGA problem,” Bessent said on Bloomberg TV Wednesday evening.
Bessent was referring to Chinese AI startup DeepSeek, whose new language models sparked a rout in U.S. technology stocks in late January. The emergence of DeepSeek’s highly competitive and potentially much cheaper models stoked doubts about the billions that the big U.S. tech companies are spending on AI.
The so-called Magnificent 7 stocks — Apple, Amazon, Tesla, Alphabet, Microsoft, Meta and Nvidia — started selling off drastically, pulling the tech-heavy Nasdaq Composite into correction territory. The tech-heavy benchmark is down about 13% from its record high reached on December 16.
However, the secretary downplayed the impact from President Donald Trump’s steep tariffs, which caught many investors off guard and fueled fears of a re-acceleration in inflation, slower economic growth and even a recession. Many investors have blamed the tariff rollout for driving the S&P 500 briefly into correction territory from its record reached in late February. Wall Street defines a correction as a drop of 10% from a recent high.
President Donald Trump on Wednesday laid out the U.S. “reciprocal tariff” rates that more than 180 countries and territories, including European Union members, will face under his sweeping new trade policy.
Trump and the White House shared a series of charts on social media detailing the tariff rates they say other countries impose on the U.S. Those purported rates include the countries’ “Currency Manipulation and Trade Barriers.”
An adjacent column shows the new U.S. tariff rates on each country, as well as the European Union.
Those rates are, in most cases, roughly half of what the Trump administration claims each country has “charged” the U.S.
No, I don’t like tariffs. They are stupid policy. An argument can be made for reciprocal tariffs to create a fair playing field (with the hope that both countries back down), but even then it’s a risky policy playing with consumers’ money.
But even if the reciprocal tariffs were a good idea as a policy or a tactic, Trump’s timing is terrible. He is on a very short clock to get some big things done in terms of cutting government, cutting taxes, cutting regulations, etc. He needs Congress’ support for that and the Republican margins in Congress are razor thin. When Trump’s approval rating starts sagging because everyone’s 401(k) is crashing, those marginal Republicans will stray. Trump will not be able to help encourage party discipline if he’s a lame duck president with a weak approval rating.
Get the big stuff done in Congress FIRST. The play with international trade with tariffs if you want. As he’s doing it, even if some other countries do lower their tariffs and open up markets for American goods, it will take capital to invest in building the capacity to serve those markets. It’s much harder to get capital when we suck trillions of dollars out of the equity markets.
It’s a shame what’s happened to this once great brand. A large number of those stores are in California.
Kohl’s is closing a slew of stores across 15 states this weekend.
Back in January, Kohl’s issued a press release to announce its “real estate change for 2025,” revealing the company planned to close 27 “underperforming stores” this year. In addition, Kohl’s will be closing its San Bernardino E-commerce Fulfillment Center in California in May.
I think it’s funny that the reporter felt the need to call them “import taxes” instead of “tariffs.” They seem to think that readers are too dumb to know what tariffs are. They may be right.
Speaking of dumb, tariffs are dumb. Yes, I expected Trump to follow through on his promise to implement tariffs and I still voted for him for other reasons, but tariffs are dumb economic policy.
US President Donald Trump has announced new import taxes of 25% on cars and car parts coming into the US in a move that threatens to widen the global trade war.
Trump said the latest tariffs would come into effect on 2 April, with charges on businesses importing vehicles starting the next day. Charges on parts are set to start in May or later.
The president claimed the measure would lead to “tremendous growth” for the car industry, promising it would spur jobs and investment in the US.
But analysts have said the move is likely to lead to the temporary shutdown of significant car production in the US, increase prices, and strain relations with allies.
I have not been willing to send my DNA to someone to satiate my curiosity for exactly this reason. The DNA of millions of people is this company’s most valuable asset. They are going to sell that asset to pay the bills (if they haven’t already been doing so). Insurance companies, Big Pharma, and any number of other firms will pay for that data. Furthermore, they can sell it more than once. No thanks. I don’t need to know that I’m 27% Irish.
Genetic testing company 23andMe announced on Sunday that it has filed for bankruptcy due to low demand for its ancestry kits and after a 2023 data breach damaged its reputation.
The company, which has over 15 million customers worldwide, said it voluntarily filed for Chapter 11 bankruptcy to “facilitate a sale process to maximize the value of its business.” 23andMe is seeking authorization from a bankruptcy court in Missouri to “sell substantially all of its assets.”
The company’s market value peaked at almost $6 billion after it went public in 2021, but 23andMe reported a 7% decline in revenue and losses of $174 million in the first nine months of its current fiscal year.
South Korean conglomerate Hyundai will announce a $20 billion investment in U.S. onshoring that includes a $5 billion steel plant in Louisiana, according to people familiar with the plans.
The plant is set to hire roughly 1,500 employees and will produce next-generation steel that will be used by Hyundai’s two U.S. auto plants to manufacture electric vehicles. The investment is expected to be announced Monday at the White House by President Donald Trump, Hyundai Chairman Euisun Chung and Louisiana Gov. Jeff Landry.
This is smart. One of the more frustrating things about the Biden Administration was when they would throw our BS economic stats as a counterargument to people sharing their economic woes.
The Treasury Secretary has candidly admitted that the GDP numbers that dominated the previous administration’s economic approach are not accurate.
[…]
When asked point-blank whether he believed that GDP numbers and nonfarm payrolls were accurate on the All-In podcast last week, Bessent replied: ‘No. They’re subject to big revisions over time.
‘I thought one of the big mistakes of the Biden administration was that they went with the numbers and not what the American people were feeling.’
The Treasury Secretary said the economic concerns of the public were dismissed as merely a ‘vibe-cession’ and that Biden told them, ‘you don’t know how good you’ve got it.’
Instead, Bessent said the Trump administration was going to ‘have respect for how [the public] feel and then we need to go back and look at what is causing this anxiety.’
[…]
Podcast co-host Palihapitiya praised Trump’s team for having a ‘better beat on the fact that this data is not as reliable as other administrations would say they were in order to do whatever it is they wanted to do anyway.’
Bessent agreed with the interviewer, saying that the Trump White House would not use data to justify their actions and instead listen to Americans when they express anxiety or financial hurt.
The rout extended a miserable month for markets that has seen all three major indexes wipe out their gains since the US presidential election in November.
The widespread selloff was mostly driven by anxiety about the impact of Trump’s tariffs. In an interview that aired Sunday, Trump said the US economy would see “a period of transition” and refused to rule out a recession.
When asked on Fox News’ “Sunday Morning Futures With Maria Bartiromo” if he was expecting a recession this year, Trump said “I hate to predict things like that. There is a period of transition because what we’re doing is very big.”
The classic definition of a recession is two consecutive quarters of GDP contraction. By that definition, we’ve had two recessions in the last five years.
The pandemic recession is obvious. But remember that recession in 2022 that everyone ignored? We were told that it wasn’t really a recession because look at all of these other stats blah blah blah. But it was a recession and by ignoring it, we did not take corrective action.
Since then (and before), we have been propping up our GDP with insane levels of government spending. All of that spending has been fueled by debt. It is unsustainable.
For those of us in the private sector, I don’t think we ever really recovered from the 2022 recession. Several sectors of our economy have continued to struggle and have been contracting. Inflation and government spending have masked it, but it’s real.
What I hope we will see now is restraint in government spending and getting inflation under control. Those things will both uncover the already weak spots in our economy and trigger a recession in the parts being propped up by government spending (think renewable energy, real estate, healthcare, education, higher ed, etc).
This will hurt, but it is also necessary. A capitalist economy is not meant to never contract. It must, in fact, do so in order to force capital out of inflated parts of the economy and into more productive parts. The boom-and-bust cycle is not a bug of a healthy economy. It is a feature.
Furthermore, if we don’t get government spending (funded by debt) under control, we risk completely devaluing our currency and trigger nation-killing hyperinflation. That is far, far worse than a recession.
Gird your loins, folks. It’s going to get worse before it gets better.
Excellent! Note that it looks like many, if not most, of the jobs created will not be “high tech” jobs. They will be good ol’ construction and manufacturing jobs – jobs that build the Middle Class
Apple (AAPL) announced Monday that it will spend and invest more than $500 billion in the US over the next four years, including plans to build a new manufacturing factory, double its advanced manufacturing fund, and hire 20,000 people.
“We are bullish on the future of American innovation, and we’re proud to build on our long-standing U.S. investments with this $500 billion commitment to our country’s future,” Apple CEO Tim Cook said in a statement.
“From doubling our Advanced Manufacturing Fund, to building advanced technology in Texas, we’re thrilled to expand our support for American manufacturing. And we’ll keep working with people and companies across this country to help write an extraordinary new chapter in the history of American innovation.”
See, federal workers? It happens. It sucks, but it happens. It is not an existential crisis. I’m sure that many of those 15% being cut are also good people who did their jobs well. At. Will. Employment.
Southwest Airlines plans to cut 15 percent of its corporate workforce in a bid to cut costs.
The layoffs – a first in the airline’s 53-year history – will slash around about 1,750 jobs.
WASHINGTON (AP) — The Trump administration on Thursday intensified its sweeping efforts to shrink the size of the federal workforce, the nation’s largest employer, by ordering agencies to lay off nearly all probationary employees who had not yet gained civil service protection — potentially affecting hundreds of thousands of workers.
In addition, workers at some agencies were warned that large workplace cuts would be coming.
[…]
Everett Kelley, the president of the American Federation of Government Employees representing federal workers, said the administration “abused” the probation status of workers “to conduct a politically driven mass firing spree, targeting employees not because of performance, but because they were hired before Trump took office.”
The comment from the union hack is idiotic. Almost every federal employee was hired before Trump took office.
To the wider point, this is what shrinking government looks like. Perhaps I am a bit jaded because I work in the private sector and we see this all the time. Literally… All. The. Time. When a company needs to reduce costs for budgetary reason (the federal government runs a massive deficit), they cut people. A lot of people. Many of those people are doing their jobs well and are good, loyal, smart employees. It doesn’t matter. If a business is running well, it should have many people who can be cut for performance reasons. They are cut as a matter of running a good business. But when you need to do a wider layoff, it naturally means that good people doing good work are going to get cut too. I don’t cheer it, but I understand it.
In a macroeconomic sense, these purges are good and healthy – even though they suck for the people impacted. But these hundreds of thousands of presumably good workers are entering the private sector. It will help address the labor shortages in other industries and some of them will start new ventures, thus perpetuating the engine of economic creation. It sucks for those people getting fired. It really does. But those of us in the private sector who pay the bills have gone through this many times. They should not, and for the moment, are not, immune.
I wholeheartedly oppose tariffs. There is an academic and historic argument to be made in favor of tariffs, but experience in a global economy teaches us that they do more harm than good. That being said, Trump promised tariffs when he was running and he was elected. He’s keeping his promise about something he believes in. I just think he’s wrong and voted for him for other reasons. I hope that the consequences are tolerable.
Canadian Finance Minister Dominic LeBlanc on Sunday unveiled the full list of items covered by tariffs on $30 billion worth of US goods, the first phase of Canada’s response to US tariffs.
The items include American produce, alcohol, apparel, household appliances, tools, firearms and more.
Canada’s tariffs come in retaliation after US President Donald Trump on Saturday announced sweeping levies on Canada, Mexico and China.
Embattled genetic testing company 23andMe said on Tuesday that it’s started exploring strategic alternatives for a second time, which could include a sale of the company or its assets, a restructuring or a business combination.
The stock, which lost 82% of its value last year, fell 10% in extended trading and was briefly halted.
The announcement coincided with the release of 23andMe’s third-quarter results. Revenue in the company’s consumer services business dropped 8% to $39.6 million from $42.9 million in the same period last year.
The company said it will “need additional liquidity” to fund its operations, and it is looking to raise capital.
This is brilliant… sort of. This is a technique that private companies have used for some time. When a company knows that it will need to downsize, offering a generous buyout for employees is a good way to ease the decision for the employer and the employee. The next step, of course, is letting people go to get the organization down to the right size. I don’t think, however, that this sort of widescale technique has been used in government. And frankly, with all of the employment turmoil our economy has seen through the pandemic – much of that turmoil caused by government employees who sat securely in their jobs – my “give a darn” about their complaints is pretty much gone.
President Donald Trump’s administration is offering federal workers the chance to take a “deferred resignation,” which would mean they agree now to resign but get paid through September.
A senior administration official told NBC News that they expect 5%-10% of the federal workforce to quit, which, they estimate, could lead to around $100 billion in savings.
All full-time federal employees are eligible, except for members of the military, employees of the U.S. Postal Service, positions related to immigration enforcement and national security and other jobs excluded by agencies.
[…]
The offer went out to the federal workforce through a new system the Trump administration set up that gives officials the ability to email all federal employees at once.
The email included a draft resignation letter for them to review. If a person wishes to resign, they will be able to reply with the word “resign.”
The resignation period will begin Tuesday and go through Feb. 6.
“If you choose to remain in your current position, we thank you for your renewed focus on serving the American people to the best of your abilities and look forward to working together as part of an improved federal workforce,” the email that will be sent to federal workers reads. “At this time, we cannot give you full assurance regarding the certainty of your position or agency but should your position be eliminated you will be treated with dignity and will be afforded the protections in place for such positions.”
SeaD Consulting, a food safety technology company, tested shrimp from randomly chosen restaurants in Baton Rouge, Louisiana; Biloxi, Mississippi; Galveston, Texas; and Tampa Bay, Florida. Researchers found a significant number of the restaurants were passing off their shrimp as locally sourced, even though they were grown on foreign farms and imported to the U.S.
The cities with the highest “shrimp fraud rate” were Tampa Bay and St. Petersburg, Florida, at 96%, according to SeaD Consulting. Only two of the 44 restaurants sampled were serving authentic shrimp from the Gulf of Mexico, a study found.
The U.S. Navy has instructed its members to avoid using artificial intelligence technology from China’s DeepSeek, CNBC has learned.
In a warning issued by email to “shipmates” on Friday, the Navy said DeepSeek’s AI was not to be used “in any capacity” due to “potential security and ethical concerns associated with the model’s origin and usage.”
A spokesperson for the U.S. Navy confirmed the authenticity of the email and said it was in reference to the Department of the Navy’s Chief Information Officer’s generative AI policy.
The race for domination in artificial intelligence was blown wide open on Monday after the launch of a Chinese chatbot wiped $1tn from the leading US tech index, with one investor calling it a “Sputnik moment” for the world’s AI superpowers.
Investors punished global tech stocks on Monday after the emergence of DeepSeek, a competitor to OpenAI and its ChatGPT tool, shook faith in the US artificial intelligence boom by appearing to deliver the same performance with fewer resources.
The tech-heavy Nasdaq Composite closed down 3.1%, with the drop at one point wiping more than $1tn off the index from its closing value of $32.5tn last week, as investors digested the implications of the latest AI model developed by DeepSeek.
The most important aspect of this is to, once again, highlight how we will never take the economic leaps ahead of China that our work and ingenuity deserve until we secure American IP from being stolen. This is a warning shot that China is intent on taking the leadership in the tech sector just as they did in manufacturing.
This also should refocus investment efforts in the US. If the value of a company can be destroyed overnight because China stole their IP, it makes every investment in AI that much riskier.
BEIJING — A record share of U.S. companies in China are accelerating their plans to relocate manufacturing or sourcing, according to a business survey released Thursday.
About 30% of the respondents considered or started such diversification in 2024, surpassing the prior high of 24% in 2022, according to annual surveys from the American Chamber of Commerce in China.
[…]
While India and Southeast Asian countries remained the most popular destination for relocating production, the survey showed 18% of the respondents considered relocating to the U.S. in 2024, up from 16% the prior year.
The majority of U.S. companies did not plan to diversify. Just over two-thirds, or 67%, of respondents said they were not considering relocating manufacturing, a 10 percentage point drop from 2023, the survey showed.
The latest AmCham China survey covered 368 members from Oct. 21 to Nov. 15. Trump was re-elected U.S. president on Nov. 5.
The project, dubbed Stargate, was unveiled at the White House by Trump, Softbank CEO Masayoshi Son, OpenAI CEO Sam Altman and Oracle co-founder Larry Ellison.
The executives committed to invest an initial $100 billion and up to $500 billion over the next four years in the project, which will be set up as a separate company.
“What we want to do is we want to keep it in this country,” Trump said of AI, noting that China is a major competitor in the nascent industry.
Stargate’s first joint venture will be to construct data centers in Texas — an effort that is already underway, Ellison said in the Roosevelt Room.
OpenAI later said in an X post that the project “will not only support the re-industrialization of the United States but also provide a strategic capability to protect the national security of America and its allies.”
Softbank’s Son will be the chairman of Stargate, while semiconductor company Arm, Microsoft, NVIDIA, Oracle, and OpenAI will be “the key initial technology partners,” OpenAI said in the post.
