Asian stock markets fell on Monday following Donald Trump’s announcement of steep tariffs on Colombian goods in response to the country’s refusal to accept U.S. deportation flights. The move, which also included revoking visas for Colombian officials, initially led President Gustavo Petro to impose retaliatory tariffs before ultimately agreeing to resume deportation flights. The development raised concerns about Trump’s aggressive use of tariffs as a negotiation tool, contributing to market volatility.
Investors were also reacting to the launch of a new Chinese generative AI model, DeepSeek, which claims to rival major Western AI firms despite its low development costs. The introduction of this technology spurred fears of increased competition, leading to losses for tech and chip firms, particularly in Tokyo, where SoftBank shares tumbled over eight percent. Meanwhile, broader markets are anticipating the Federal Reserve’s policy meeting, where interest rate decisions will be closely watched.
The dollar strengthened against several currencies, including the Mexican peso, while gold hovered near record highs as a safe-haven asset amid economic uncertainty. Analysts warned that Trump’s trade policies, combined with potential tax cuts and deregulation, could reignite inflation, forcing the Fed to reconsider future rate cuts. Wall Street indices also ended lower on Friday, with AI-related stocks taking a hit, reflecting broader uncertainty over the sector’s rapid evolution.
source: Punch