GLOBAL MARKETS-Asian shares slip on U.S. protectionism fears

From Reuters - March 13, 2018

SYDNEY (Reuters) - Asian shares eased on Wednesday amid fears of rising U.S. protectionism as President Donald Trump fired his Secretary of State, regarded as a moderate in his administration, and eyes hefty tariffs on Chinese imports.

The combination left investors scurrying for safety as global equities took a knock, the dollar fell and bonds rose.

MSCIs broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.3 percent, retreating from a 1-1/2 month high hit on Tuesday.

Australian shares stumbled 0.8 percent in early trade, while Japan's Nikkei .N225 dropped 0.8 percent. South Korea's Kospi index .KS11 declined 0.7 percent.

The weakness followed losses on Wall Street, with the Dow .DJI off 0.7 percent, the S&P 500 .SPX down 0.6 percent and the Nasdaq Composite .IXIC down 1.0 percent.

Trump fired Secretary of State Rex Tillerson on Tuesday after a series of public rifts over policy on North Korea, Russia and Iran, replacing his chief diplomat with hawkish CIA Director Mike Pompeo.

Critics said the move would sow more instability in the volatile Trump administration and marks the departure of another moderate who sought to emphasize the United States strong ties to its allies.

Separately, Trump is also looking to impose tariffs on up to $60 billion of Chinese imports, targeted at information technology, consumer electronics and telecoms, two people who had discussed the issue with the Trump administration said.

Tillersons departure has left some worrying that it provides a green light to those in the office pushing for more protectionist measures, analysts at ANZ Bank said in a note to clients. Protectionism is on the rise.

Investors suspect policy makers who favor protectionism will also seek to use the currency as a trade weapon, if not overtly then through benign neglect.


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