Asian Shares Pare Early Gains As China Retaliates With Tariffs On US Goods

(RTTNews) - Asian stocks gave up some early gains but still ended higher on Tuesday as China slapped tariffs on U.S. imports in a rapid response to a 10 percent trade duty imposed by the Trump administration on Chinese goods, which took effect from 00:00 ET today.

China's Finance Ministry said it will impose a 15 percent duty on imports of coal and liquified natural gas from the U.S.

Also, there will be 10 percent additional duty on imports from the U.S. of crude oil, agricultural equipment and automobiles from February 10.

China's Commerce Ministry imposed export controls on tungsten, tellurium, molybdenum, bismuth, and indium to protect national security interests. China is a top producer of rare earths and exotic materials.

Calvin Klein owner PVH Corp and biotechnology firm Illumina have been added to the of unreliable entities after the two companies took what it called "discriminatory measures against Chinese enterprises" and "damaged" legitimate rights and interests of Chinese companies.

In another significant development, China's regulatory body said it would begin an antitrust investigation into Google over alleged anti-competitive market behavior. Earlier, Trump had agreed to pause tariffs on Mexico and Canada for a month but gave China no such relief.

The dollar rebounded after an initial retreat, sending gold prices lower in late Asian trade.

Oil prices fell sharply, with WTI crude futures falling nearly 2 percent as supply disruption fears eased and trade war worries mounted.

Markets in mainland China remained shut for the Lunar New Year holidays.

Hong Kong's Hang Seng index soared 2.83 percent to 20,789.96, with tech stocks such as Baidu and Alibaba surging 3-4 percent.

Japanese markets rose notably as the yen attracted fresh sellers amid worries that Japan will also be an eventual target for Trump's trade tariffs.

The exporter-heavy Nikkei average climbed 0.72 percent to 38,798.37 while the broader Topix index settled 0.65 percent higher at 2,738.02. Automakers Nissan, Honda and Toyota rose 1-2 percent.

South Korea's Kospi gained 1.13 percent to close at 2,481.69, led by tech stocks. Market heavyweight Samsung Electronics rallied 3.3 percent.

Australian markets erased early gains to end on a flat note after China retaliated with new tariffs on U.S. imports. Across the Tasman, New Zealand's benchmark S&P/NZX-50 index closed 0.74 percent higher at 12,905.04.

U.S. stocks recovered earlier steep losses but still ended notably lower overnight after Trump said tariffs against Mexico would be paused for one month following an agreement on border security to stop the flow of fentanyl and illegal migrants into the U.S.

Investors also digested data showing that U.S. manufacturing grew for the first time in more than two years in January.

The tech-heavy Nasdaq Composite lost 1.2 percent, the S&P 500 shed 0.8 percent and the Dow dipped 0.3 percent.

After the markets closed, Canadian Prime Minister Justin Trudeau announced that proposed U.S. tariffs will be paused for at least 30 days.