Asian markets struggle as investors assess the rapid increase in China-US trade tensions

Asian markets struggled on Wednesday, and gold hit a new record as investors monitored rising tensions between China and the United States following the exchange of tariffs, raising concerns about a potential trade war between the two economic giants.

Markets in Shanghai and Hong Kong were among the biggest losers, particularly after the US Postal Service announced it would suspend inbound parcels from China and Hong Kong, impacting e-commerce companies.

This drop in the Asian markets came despite a positive lead from Wall Street, where relief came after US President Donald Trump reached a deal to delay 25% tariffs on imports from Canada and Mexico.

Disappointing earnings from Google-parent Alphabet and Advanced Micro Devices contributed to the unease in the tech sector, already affected by the launch of a new chatbot by Chinese startup DeepSeek.

Analysts noted that while the trade spat between China and the US had reignited, China’s more measured response offered some hope that a major crisis could be avoided.

China's tariffs were seen as symbolic, affecting only 12% of total US imports, and analysts suggested the risk of escalation was lower than initially expected, though the volatility risk remains due to Trump’s unpredictable behavior.

Gold prices hit a new high of $2,853.82 as investors flocked to the metal for safety.

Meanwhile, the yen strengthened after Japan reported higher-than-expected nominal wage growth, raising expectations that the country’s central bank would continue hiking interest rates.