Asian equities rose Thursday as investors looked past Donald Trump’s threat to impose 100 percent tariffs on semiconductors, with optimism still high that the Federal Reserve will slash interest rates next month.
A day before sweeping tariffs came into effect on dozens of countries, the US president said Washington would also be placing a “100 percent” tariff on chips and semiconductors but he did not offer a timetable.
However, he said “the good news for companies like Apple is, if you’re building in the United States, or have committed to build… in the United States, there will be no charge”.
Stock gains were led Thursday by Taiwan’s giant TSMC, which surged almost five percent, with the island’s National Development Council chief Liu Chin-ching saying the firm was in the clear.
“Because Taiwan’s main exporter is TSMC, which has factories in the United States, TSMC is exempt,” he told a briefing in parliament.
TSMC, which is ramping up manufacturing in Arizona, has pledged to invest as much as $165 billion in the United States.
Seoul-listed Samsung, which is also pumping billions into the world’s number one economy, rose more than two percent while South Korean rival SK hynix was up more than one percent.
Apple-linked firms were helped after the US giant said it would invest an additional $100 billion in the United States, taking its total pledge to $600 billion over the next four years.
However, Japanese trade Tokyo Electron, a major producer of chipmaking equipment, plunged more than two percent, while chipmaker Renesas sank 3.8 percent.
Precision tools maker Disco Corporation gave up 1.8 percent.
Sony soared 4.1 percent after the PlayStation-maker raised its annual profit forecasts, citing strong performance in its key gaming business and a smaller-than-expected negative impact of US trade tariffs.
– Tariff talks –
Analysts said that while the chip threat was steep, there was optimism the final level would be lower.
“The figure fits Trump’s approach of ‘open high, negotiate down’ and the final figure could be similar to reciprocal tariffs to limit inflation in consumer goods — given that many have chips,” said Morningstar’s Phelix Lee.
Trump’s remarks came hours before his sweeping “reciprocal” tariffs kicked in Thursday against trading partners, and after he doubled his levy on India to 50 percent over its purchase of Russian oil.
Fifty percent tolls on Brazilian goods came into place Wednesday.
Asian markets extended their recent run-up following a strong day on Wall Street, where Apple jumped more than five percent and Amazon piled on four percent.
