Morning Bid: Trump rails at global rivals as tariff plans fall short

Trade Tensions and Market Snapshot

A look at the day ahead in European and global markets from Gregor Stuart Hunter

Is this the Art of the Deal? U.S. President Donald Trump has warned trade partners not to "play games" by backing out of recently agreed trade deals after the Supreme Court struck down his emergency tariffs.

But some foreign governments just want to know if the terms they originally negotiated are still good.

Tariff Setback and SOTU Expectations

Trump is expected to "come out swinging" during his annual State of the Union address later on Tuesday after the tariff setback, and may take aim at some of the Supreme Court Justices seated in the chamber.

But governments in Asia have questions. Japan wants to know whether the nation's treatment under a new U.S. tariff regime will be as favourable as an agreement reached between the two sides last year. And Taiwan's government is seeking assurances from the U.S. that the beneficial terms it has already agreed do not change.

China’s Export Curbs on Japan

Not to be outdone by the trade drama in Washington, China on Tuesday prohibited the export of dual-use items to 20 Japanese entities that it says have military links, aimed at curbing Japan's "remilitarisation". 

Asia Market Reaction and AI Boost

Markets in Japan and China largely shrugged off the dispute, gaining a boost from lower U.S. tariffs as they reopened after local holidays and caught up on the trade news from Friday. The Nikkei 225 and CSI 300 both tacked on more than 1%.

Elsewhere in Asia, markets stabilised after the selloff on Wall Street on Monday that some analysts attributed to a "doomsday" analysis from Citrini Research released earlier this week which presented a vision of the havoc that AI could wreak on the global economy in the years to come. U.S. S&P 500 e-mini futures recovered, rising 0.3%.  

Meanwhile, manufacturers in the AI supply chain propelled benchmarks in Taiwan and South Korea to fresh highs, sending MSCI's broadest index of Asia-Pacific shares outside Japan to a new record.

European Futures at the Open

In early European trade, pan-region futures were last up 0.3%, German DAX futures gained 0.2% and FTSE futures were down 0.1%.

What to Watch Today

Key developments that could influence markets on Tuesday

Earnings: Home Depot, Workday, Telefónica, Endesa

Company earnings:

Home Depot, Workday, Telefonica, Endesa

Economic events:

Data: France Business Confidence (February)

France: Business confidence for February

Debt auctions:

Auctions: UK 7‑Year Government Debt

UK 7-year government debt

(Reporting by Gregor Stuart Hunter; Editing by Sonali Paul)