Trump imposes 15% tax on Japanese imports amid trade tensions

On July 25, 2025, Asian shares retreated following a record-setting day on Wall Street driven by gains in tech stocks, particularly Alphabet, which rose after delivering stronger-than-expected profits. The downturn in Asian markets was influenced by President Donald Trump’s announcement of a trade deal affecting Japan, which includes a new 15% import tax. Japan's Nikkei 225 index saw a drop of 0.7% to 41,511.09, following two days of incremental gains. The latest inflation data from Tokyo indicated a year-on-year rise of 2.9% for July, slightly down from 3.1% in June, suggesting potential future monetary policies from the Bank of Japan. In China, both the Hang Seng and Shanghai Composite indices experienced declines, with respective losses of 1.1% and 0.3% as tensions persist regarding trade agreements and climate change discussions with the European Union. Meanwhile, the S&P 500 continued to perform well in the U.S. markets, lifting the Nasdaq and contributing to bullish sentiment amidst trade deal speculation. However, concerns about economic implications of the proposed tariffs lingered in the background and led analysts to closely monitor the situation to evaluate potential adjustments in tariff rates. Oil prices experienced a slight increase, adding to the mixed performance in the financial markets overall.