(Bloomberg) -- Asian stocks reliant on exports, ranging from Japanese carmakers to Chinese e-commerce firms, nosedived after US President Donald Trump unleashed his first wave of tariffs, signaling the beginning of a new round of global trade war.
On Saturday, Trump ordered general tariffs of 25% on Canada and Mexico and 10% on China to come into effect on Tuesday, as well as promising a similar move later for the European Union. The MSCI Asia Pacific Index fell nearly 3% in Monday trading in its biggest intraday drop in six months.
Asia investors have been bracing for impact from Trump’s pledges on sweeping trade levies, but some had anticipated tariffs might be delayed or avoided on further negotiations following his softer-than-expected tone on China. Still, corporate earnings are bound to take a hit, given many economies in the region are heavily exposed to US exports, analysts say.
The new tariffs may hurt China’s exports particularly and undermine its already-struggling economy, and in turn trigger Beijing to roll out more forceful stimulus to counter the impact.
“Macro-wise, we think the immediate channels where Asian equities might be impacted is via potentially higher US dollar,” Nomura Holdings Inc. strategists including Chetan Seth wrote in a note. “We also believe investors are likely to assess which sectors or areas in China might be more exposed to these tariffs.”
Here are some of the sectors in Asia that saw the biggest impact from Trump’s trade war:
Automakers
Japan’s biggest automakers count on North America as a crucial market and sell cars there that were manufactured or assembled in Mexico near the US border. Shares of Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. all dropped at least 5%.
South Korean automaker Kia Corp., which has a plant in Mexico, ended the day down 5.8%.
Chinese electric-vehicle manufacturers that are seeking to expand their presence in the US market, such as Li Auto Inc. and XPeng Inc., were hit by the new tariffs and their shares fell in Hong Kong.
Other Mexico-Exposed Stocks
Some artificial intelligence hardware firms in Taiwan that have production in Mexico took a hit, with shares of Quanta Computer Inc. down nearly 10%. Delta Electronics Inc., which has investments in Mexico, dropped.
Other non-auto manufacturers in the region with plants in Mexico, such as LG Electronics Inc., also slumped.
Shares of Indian generic drugmakers and auto component suppliers with presence in Mexico, such as Samvardhana Motherson International Ltd., Tata Motors Ltd. and Lupin Ltd., ended the day lower.
E-Commerce
Shares of Chinese e-commerce platforms such as JD.com Inc. declined as Trump’s plans extinguished a long-held tariff exemption for packages worth less than $800.
Chinese companies that produce small durable items that account for a major part of these so-called de-minimis shipments — such as clothing, accessories, home goods and electronics — also saw their stocks drop. Shares of sportswear maker Li Ning Co. and home appliance maker Haier Smart Home Co. all slumped.
Chips
Asia’s biggest chip exporters, including Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co., declined as Trump said he would tax chips, repeating that vow after his meeting Friday with Nvidia Corp. Chief Executive Officer Jensen Huang.
Meanwhile, Japanese semiconductor equipment makers, which typically generate the bulk of their revenue from China, also declined. Shares of Tokyo Electron Ltd. fell 1.7%, while Advantest Corp. and Disco Corp. tumbled at least 4%.
China’s Self-Reliance
Shares of Chinese chipmakers such as Semiconductor Manufacturing International Corp. rose on Monday as traders envision Trump’s tariffs fanning the nation’s quest for industrial self-sufficiency. Beijing has been trying to bolster its own artificial intelligence chip manufacturing capabilities as Washington limits exporting of what it sees as cutting-edge technology to China.
China Rivals
Indian chemical makers, including UPL Ltd. and Jubilant Ingrevia Ltd., rallied on bets that US tariffs on China will help them gain market shares from Chinese competitors.
Malaysian glove makers’ shares, including Supermax Corp., Top Glove Corp. and Hartalega Holdings Bhd., also surged on a similar outlook.
Resources
Asian oil refiners could emerge as winners from US tariffs, analysts say. Trump’s levies on Canadian and Mexican oil imports may give Asian firms an edge over US rivals, while their profit margins are helped by higher product prices.
But Australian miners, such as BHP Group Ltd. and Rio Tinto Ltd., dropped in Sydney on concerns that demand for metals will be lower as the global economy slows following US tariffs.
--With assistance from Abhishek Vishnoi, Youkyung Lee and Aya Wagatsuma.
(Updates with more sectors.)