Portugal Colonial - Asian stocks extend global rout after Trump's shock tariff blitz

The US president's harsher-than-expected "Liberation Day" levies sent shockwaves through markets on Thursday, with Wall Street suffering its worst day since the early days of the Covid-19 pandemic and the dollar tanking against major peers.

As stocks were falling off a cliff on Thursday, the 78-year-old Republican insisted they will "boom" as the economy recalibrates.

Trump says he wants to make the United States free from reliance on foreign manufacturers, in a massive economic reshaping that he likened to a medical procedure.

"It's what is expected," he said. "The patient was very sick. The economy had a lot of problems. It went through an operation. It's going to be a booming economy. It's going to be amazing."

And White House Press Secretary Karoline Leavitt warned on CNN: "The president made it clear yesterday this is not a negotiation."

Trump later said he would negotiate "as long as they are giving something that is good".

But there is a growing concern that governments will retaliate in kind, further harming global trade and battering the world economy.

Some have already warned they will act, while others have said they will take time to take stock of the impact of the measures.

China demanded the tariffs be immediately cancelled and vowed countermeasures, while France and Germany warned that the European Union could target US tech firms.

French President Emmanuel Macron called for suspending investment in the United States until what he called the "brutal" new tariffs had been "clarified".

Jim Zelter, president of Apollo Global Management, warned that the chances of a US recession had risen to at least one in two.

He added that the levies could put the Federal Reserve in a bind as it had to weigh hiking interest rates to fight a possible inflation spike or cut them to support the economy.

"If I was here six months ago, I would have said a recession in 2025 or 2026 was one-in-five and now that's certainly one-in-two if not higher," he told Bloomberg Television.

Traders are now eyeing a 50 percent chance the Fed will cut rates four times this year.

Asian investors continued Thursday's retrenchment.

Tokyo shed more than two percent for the second day running, with car giants taking the heat once more. Toyota, Nissan and Honda lost between 4.2 and 5.2 percent. Tech titan Sony and tech investor SoftBank were also sharply lower again.

Sydney, Singapore, Seoul, Wellington and Manila were also in the red.

Hong Kong, Shanghai, Taipei and Jakarta were closed for holidays.

The selling came after Wall Street's tech-heavy Nasdaq Composite plunged six percent, the S&P 500 shed 4.8 percent -- its biggest dip in a day since 2020 -- and the Dow fell four percent.

The dollar remained under pressure, sitting at a six-month low against the yen, euro and sterling.

Oil also extended losses, having tanked more than six percent the day before on fears about the impact of a possible recession on demand.

News that OPEC+ had unexpectedly hiked supply three times more than planned added to selling pressure on the commodity.

The "historic selling pressure in stock markets is not an overreaction, considering that recessions have generated significant drawdowns in equities in the past", said Jose Torres, senior economist at Interactive Brokers.

"An economic downturn is now an even chance, with odds rising the longer these trade measures are maintained."

- Key figures around 0230 GMT -

Tokyo - Nikkei 225: DOWN 2.6 percent at 33,818.18 (break)

Hong Kong - Hang Seng Index: Closed for a holiday

Shanghai - Composite: Closed for a holiday

Euro/dollar: UP at $1.1067 from $1.1050 on Thursday

Pound/dollar: UP at $1.3105 from $1.3099

Dollar/yen: UP at 146.24 yen from 145.99 yen

Euro/pound: UP at 84.45 pence from 84.34 pence

West Texas Intermediate: DOWN 0.6 percent at $66.53 per barrel

Brent North Sea Crude: DOWN 0.6 percent at $69.72 per barrel

New York - Dow: DOWN 4.0 percent at 40,545.93 (close)

London - FTSE 100: DOWN 1.6 percent at 8,474.74 (close)

L.Torres--PC