Most Southeast Asia stock markets closed weaker on Tuesday, with the Philippine index leading the decline, after China's counter tariffs on US goods stoked an escalation in the months-long trade conflict between Washington and Beijing.
China on Monday said it would impose higher tariffs on $60 billion worth of US goods, despite President Donald Trump's warning to not retaliate against additional tariffs on Chinese imports.
"With the announcement of China's retaliation overnight that tariffs on 2,493 US products will be raised to between 5% and 25% from June 1, the risk-off tone has submerged most financial markets," OCBC analysts said in a note to clients.
Philippine stocks, which resumed trading following an election holiday, tumbled 1.2% to its lowest close since March 4, weighed down by consumer stocks.
The archipelagic nation held its mid-term elections on May 13, and unofficial results showed that President Rodrigo Duterte's allies held the top spots.
Indonesia's index closed at a near six-month low, pressured by basic material and healthcare stocks. Jakarta-based tire manufacturer Multistrada Arah Sarana shed about 25% to close at a near six-month low.
Singapore's Straits Times index closed weaker, restrained by industrial and oil stocks. Conglomerate Jardine Matheson Holdings, among the top drag on the index, ended 1.5% lower.
Bucking the trend, Vietnam stocks ended the session marginally higher, driven by utilities sector.
Analysts are of the view that Vietnam could benefit if the US-China trade war continues to drag.
Tech heavyweights such as South Korea's Samsung Electronics and LG Electronics, are seen shifting their manufacturing facilities into Vietnam from China, to cut costs and minimize tariffs.
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