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Tech stocks in South Korea, Taiwan fall after new U.S.

tariffs

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Uncertainty persists as U.S.-China trade deal unresolved

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Investors expect higher average tariffs even after more

deals

By Gregor Stuart Hunter and Rae Wee

SINGAPORE, Aug 1 (Reuters) - U.S. President Donald

Trump's Friday tariff deadline brought little reprieve for

markets, with tech stocks in South Korea and Taiwan hit hard as

investors fretted over the cost of disrupting global supply

chains and the outcome of talks with China.

For traders inured to Trump's repeated threats, his

follow-through on blanket tariffs for dozens of nations may be a

wake-up call, as the deadline to strike trade deals with the

United States expired and new levies arrived in Asia right on

cue.

While the new export duties are below the "Liberation Day"

tariffs unveiled on April 2, they fuel uncertainty, as several

countries are still in talks with the United States.

Investors are also still on edge over whether the United

States and China will be able to clinch a deal to avert a tariff

of 55% tariff before their trade truce ends on August 12.

"There are no real winners here," said Charu Chanana, chief

investment strategist at Saxo in Singapore.

"The U.S. administration can claim a political win, having

followed through on its threats, but economically the impact

will be felt in higher prices, disrupted supply chains, and

slower growth," she said.

"Even countries that got away with 10% duties aren't

celebrating."

The move is a reminder that a U.S. president who has

consistently advocated protectionist policies for decades now

has the power to force higher costs on companies across complex

global supply chains that took just as long to build.

That is unless foreign governments are prepared to accept

deals that prioritise American interests.

Stocks have rallied substantially from lows hit after the

tariffs were first threatened, as Trump offered a temporary

reprieve and countries such as Britain, Japan, and South Korea

reached trade deals.

The MSCI All Country World Index is up 28.4%

from a bottom hit on April 7. But the gauge has now fallen for

the past four consecutive sessions.

The average tariff rate is going from about 2.5% to 15.3%,

said Prashant Bhayani, chief investment officer for Asia at BNP

Paribas Wealth Management.

"That's a step change," he said. "But if everyone's getting

tariffed, it's more about that relative (level), because that

affects how much you get, and perhaps relative to your

competitors."

Underscoring investors' worry were comments by U.S. Treasury

Secretary Scott Bessent to CNBC on Thursday that China's trade

deal was "not 100% done," adding that he would talk to President

Trump later the same day.

"Until the China deal comes out, you don't really know which

country has a comparative advantage," said Gary Tan, a portfolio

manager at Allspring Global Investments in Singapore.

"There's limited ways to judge whether a tariff rate for

these emerging Asia developing market economies is a good rate

or a bad rate."

TECH SHOCK

Stocks in Asia-Pacific's biggest tech hardware makers

suffered the brunt of the selling, with South Korea's Kospi

index dropping as much as 3.7% and Taiwan's benchmark

index down as much as 1.6% before recovering.

Trump hit Taiwan with a tariff of 20% on Friday, higher than

the 15% the United States agreed with Japan and South Korea,

though the government said it would continue to negotiate for a

lower duty.

Taiwan and South Korea are critical links in the supply

chain of advanced logic chips and memory chips respectively.

Taiwan Semiconductor Manufacturing Company ( TSM ) shed

1.7%, as shares in its supplier Tokyo Electron ( TOELF ) plunged

18% after cutting its profit forecasts by a fifth.

SK Hynix fell 5.5% amid a broader rout in South Korean

stocks as the government said it would raise taxes on corporate

income and stock investments.

The declines also rattled currency markets, with the South

Korean won weakening past 1,400 per dollar for the

first time since May 19 and the Taiwan dollar weakening

past 30 against the greenback for the first time since June 4.

The sector shrugged off better-than-expected earnings from

Apple ( AAPL ) and focused instead on a warning from CEO Tim

Cook that U.S. tariffs would add $1.1 billion in costs over the

period.

Weaker-than-expected results from Amazon.com's ( AMZN )

cloud-computing unit added to the gloom.

But even after the tariff deadline, some market participants

said they expected agreements to remain in flux.

"I expect that the rates will continue to be changed between

now and maybe even up until next year," said Jeff Ng, head of

Asia macro strategy at SMBC in Singapore. "Trump will continue

to make some changes to the tariffs."