- Japan's Nikkei plunged nearly 3% with tech stocks losing over 10%
- New 20% tariffs on Chinese goods take effect March 4th
- Nvidia shares drop 8.5% amid AI chip market uncertainty
- U.S. unemployment claims hit 3-month high despite strong economy
- Oil prices fall 1% as demand concerns outweigh supply cuts
The global financial landscape shuddered Friday as President Trump confirmed aggressive tariff increases targeting major trading partners. Tokyo's benchmark index suffered its worst single-day decline in 14 months, with semiconductor equipment manufacturers bearing the brunt of selling pressure. Analysts attribute the rout to compounded fears of prolonged trade wars and structural shifts in the artificial intelligence sector.
China's Commerce Ministry condemned the tariff escalation as economically destructive,noting over 60% of affected goods involve intermediate products critical to U.S. manufacturing. This development comes days after Beijing-based DeepSeek unveiled AI capabilities rivaling Western counterparts using less advanced hardware - a revelation that erased $120 billion from global chipmaker valuations.
Market chaos extended beyond Asia, with European futures pointing to 2% opening losses. The tech-dominated Nasdaq now sits 8% below its February peak, pressured by dual concerns of trade-related inflation and potential AI industry realignment. Semiconductor supply chain experts warn the new tariffs could delay 5G rollout timelines by 6-9 months while increasing smartphone production costs by 15-20%.
Vietnam's emerging electronics manufacturing sector illustrates the regional ripple effects. The country's export-driven economy faces collateral damage from U.S.-China tensions, with 35% of its semiconductor packaging facilities reporting order cancellations this week. We're seeing clients hedge bets across Southeast Asia,noted HSBC's ASEAN technology analyst during a Bangkok briefing.
Despite the turmoil, some investors see opportunity. Warren Buffett's Berkshire Hathaway gained 1.7% as its $168 billion cash reserve positions it to acquire distressed assets. Meanwhile, oil prices found partial support from OPEC+ supply discipline, though analysts caution energy demand could weaken if tariff impacts persist through Q2.
The Federal Reserve now faces mounting pressure to balance growth concerns against sticky inflation. With consumer confidence surveys showing 40% of households expect recession within 12 months, policymakers must navigate twin risks of economic slowdown and imported price pressures. Friday's unemployment data offers limited comfort - while claims rose to 225,000, this remains below levels preceding past downturns.
As markets enter what traders call the tariff era,volatility appears likely to persist. The coming weeks will test whether corporate earnings can overcome geopolitical headwinds, particularly in tech sectors where AI innovation cycles collide with trade policy realities. For retail investors, diversification into defensive stocks and commodities may prove essential during this period of unprecedented economic crosscurrents.
