Asia Markets Slip as Trump Tariffs and Fed Rate Cut Doubts Weigh on Sentiment

Asian shares opened weaker on Friday as investors reacted to fresh U.S. tariffs announced by President Donald Trump and scaled back expectations of aggressive Federal Reserve rate cuts. Trump revealed sweeping new duties, including 100% tariffs on imported branded drugs, 25% on heavy-duty trucks, and 50% on kitchen cabinets. Additional tariffs of 50% on bathroom vanities and 30% on upholstered furniture will begin next week, with all measures effective October 1.

The impact was immediate across Asia-Pacific markets. Japan’s Topix pharmaceutical index slid 1.4%, while Australian biotech giant CSL dropped more than 3%. The Nikkei fell 0.5%, and MSCI’s broadest Asia-Pacific index outside Japan lost 0.45%. Analysts noted the tariffs added to global market uncertainty, with IG’s Tony Sycamore saying risk assets faced “a shaky backdrop.” U.S. futures also reflected caution, with Nasdaq down 0.08% and S&P 500 slipping 0.02%. In contrast, European futures managed small gains, with EUROSTOXX 50 up 0.37% and FTSE rising 0.25%.

Markets were also pressured by stronger-than-expected U.S. economic data, which reduced expectations of deep Fed cuts. Traders are now pricing in roughly 39 basis points of cuts by December, down from earlier projections. Economists at Wells Fargo highlighted America’s resilience, while Fed policymaker Stephen Miran urged sharper cuts to protect the labor market. The dollar strengthened, hovering near 150 yen, while the euro slipped to $1.1668 and sterling steadied at $1.3344.

In commodities, Brent crude rose 0.24% to $69.59 a barrel and U.S. crude gained 0.43% to $65.26. Spot gold edged up to $3,751.69 an ounce. Meanwhile, Trump signaled possible easing of sanctions on Turkey following talks with President Tayyip Erdogan, suggesting Ankara could resume F-35 jet purchases if it halts Russian oil imports.