Investing.com– Asian stocks bounced back on Tuesday after U.S. President Donald Trump postponed trade tariffs on Canada and Mexico, easing some market concerns, though caution persisted ahead of the impending tariffs on Chinese imports.
Regional equities recovered most of the ground after steep declines on Monday, which stemmed from Trump’s tariff announcement.
U.S. stock index futures were also higher in Asian trade after Wall Street ended lower on Monday.
Asia stocks jump as tariff delays ease immediate concerns
Trump had announced a 25% tariff on imports from Canada and Mexico, alongside a 10% levy on Chinese goods, effective February 4.
However, following discussions with Canadian and Mexican counterparts, Trump agreed to postpone the tariffs on Mexico and Canada by 30 days.
Asian stocks were higher as the postponement eased immediate trade war concerns and reduced the risk of supply chain disruptions.
Markets also view the delay as a potential window for further negotiations, reducing uncertainty in the short term.
Japan’s Nikkei 225 index jumped 1.5%, while TOPIX rose 1.4%.
South Korea’s KOSPI index climbed 1.8%, rebounding from its lowest level since early January.
Australia’s S&P/ASX 200 index gained 0.4%, while Philippine’s PSEi Composite jumped 2%.
Elsewhere, Futures for Nifty 50 indicated a marginal rise at open, while Thailand’s SET Index fell 0.8%, bucking the regional trend.
Chinese tariffs still on tap; Hong Kong stocks surge on AI optimism
Chinese markets were closed for the Lunar New Year holiday and will resume trade on Wednesday this week.
The implementation of U.S. tariffs on Chinese imports was still scheduled to take effect later in the day.
However, markets shrugged off most concerns about levies on China, in anticipation of future negotiations and local stimulus measures.
Additionally, with only the 10% tariff set to take effect, investors anticipate less severe economic fallout than initially feared.
This sentiment was reflected in Hong Kong stocks, with Hang Seng index jumping 3% on Monday.
Hong Kong-listed Chinese tech stocks surged on optimism around local artificial intelligence (AI) models like DeepSeek and Alibaba's (HK:9988) Qwen.
Semiconductor Manufacturing International Corp (HK:0981) (SMIC) shares led the gains with a 7.2% rise, while Xiaomi (HK:1810) and Alibaba stock rose 5%, each.