Morning brief: Asia stocks slide on Trump tariff threats; China GDP slows
Asian markets retreated at the start of the week as renewed trade tensions between the US and Europe rattled investors, while fresh data underscored slowing momentum in China’s economy.
Sentiment was further shaped by surging safe-haven assets, warnings of a deepening global memory-chip shortage from Micron Technology, and the European Union preparing potential retaliatory measures against Washington.
Asian markets hit by tariff fears, safe havens rally
Stock markets across Asia slid on Monday after US President Donald Trump threatened to impose additional tariffs on eight European nations unless the US was allowed to buy Greenland.
The move raised fears of a broader transatlantic trade conflict and weighed on risk appetite.
Japan’s Nikkei fell 0.8%, while MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.1%.
US equity futures were weaker in thin holiday trading, with S&P 500 futures down 0.8% and Nasdaq futures falling 1.1%.
European futures also pointed lower, with EUROSTOXX 50 and DAX futures shedding 1.1%.
The dollar weakened against traditional safe havens, falling 0.4% versus the Swiss franc and 0.2% against the yen.
Gold rose 1.4% to $4,660 an ounce and silver jumped 3.3% to $92.93, both at record highs. Oil prices were largely flat amid concerns over global growth and lingering geopolitical risks in the Middle East.
Trump said he would impose additional 10% import levies from Feb. 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and Britain, rising to 25% on June 1 if no deal was reached.
China GDP meets target but momentum weakens
China’s economy lost steam toward the end of 2025 even as it met Beijing’s full-year growth target.
Gross domestic product expanded 4.5% in the fourth quarter from a year earlier, slowing from 4.8% in the third quarter and marking the weakest pace since early 2023.
For the full year, GDP grew 5%, matching the government’s goal.
Chinese onshore stocks edged slightly higher after the data, while bonds and the yuan were little changed.
Domestic demand remained the main drag.
Retail sales rose just 0.9% in December, missing expectations, while fixed-asset investment contracted 3.8% for the year.
The urban unemployment rate held steady at 5.1%.
“Despite achieving the 5% growth target, China’s economy actually posted weaker on-year growth one quarter after another in 2025, which shows domestic demand is still weak,” said Larry Hu, head of China economics at Macquarie Group.
Exports and manufacturing continued to underpin activity, with industrial output rising 5.2% in December and net exports contributing about a third of economic growth in 2025.
Micron warns of unprecedented memory chip crunch
Micron Technology said a global shortage of memory chips has intensified and will extend beyond this year, driven by surging demand for artificial intelligence infrastructure.
“The shortage we are seeing is really unprecedented,” Micron Executive Vice President of Operations Manish Bhatia said.
He noted that high-bandwidth memory for AI accelerators is absorbing industry capacity, leaving shortages for smartphones and PCs.
Micron and its peers have sold out much of their 2026 production, prompting the company to accelerate manufacturing expansion in the US and Asia.
Chinese media outlet Jiemian reported on Friday that leading smartphone manufacturers in China — including Xiaomi Corp., Oppo, and Shenzhen Transsion Holdings Co. — are scaling back their shipment targets for 2026 amid rising memory costs, with Oppo said to have reduced its outlook by as much as 20%.
Global smartphone shipments are expected to fall 2.1% this year as higher memory prices, driven by a chip shortage, increase costs and constrain production, according to a December estimate from industry tracker Counterpoint Research.
PC manufacturers, including Dell Technologies Inc., have also cautioned that the ongoing memory supply constraints are likely to weigh on their operations.
EU weighs retaliation against US tariff threat
The European Union is preparing potential countermeasures after Trump’s tariff threat, including reviving suspended tariffs on €93 billion of US goods and possibly deploying its anti-coercion instrument.
“President Trump has triggered an avalanche that threatens to destroy decades of transatlantic cooperation,” said Stefan Lofven, president of the Party of European Socialists.
UK Prime Minister Keir Starmer criticized President Donald Trump’s remarks as “completely wrong,” while Swedish Prime Minister Ulf Kristersson said Sweden would not submit to “blackmail.”
French President Emmanuel Macron described the threat as “unacceptable” and said he would seek to have the European Union deploy its strongest trade countermeasure, known as the anti-coercion instrument.
The European Union’s most immediate response would suspend approval of its July trade agreement with the United States, which still requires ratification by the European Parliament.
The European People’s Party, the parliament’s largest political group, said it would align with other parties to block endorsement of the deal.
EU leaders are expected to discuss options this week, even as officials say diplomacy remains the preferred path.
Economists warn that a full escalation could significantly disrupt trade flows and financial markets, adding to global uncertainty already weighing on investor sentiment.
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