Most Asian stocks drop as Trump trade policy sows uncertainty

Global markets have endured some severe volatility this month as the president looks to ramp up pressure on global partners by imposing or threatening hefty duties on their goods, citing huge trade imbalances.

In the latest move, sweeping 25 percent levies on all US aluminium and steel imports are due to come into effect at midnight in Washington (0400 GMT Wednesday), hitting numerous nations from Brazil to South Korea, as well as the European Union.

On Tuesday, Trump threatened to double those on Canada after the province of Ontario imposed an electricity surcharge on three US states. The president called that off after Ontario halted the charge.

The on-off nature of the trade policies has fuelled uncertainty in markets, and has sent the VIX «fear index» of volatility to its highest level since August.

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Traders appeared largely unmoved by Trump's attempt to soothe worries over a recession after he warned at the weekend of «a period of transition» and refused to rule out a downturn.

On Tuesday he said at the White House: «I don't see it at all. I think this country's going to boom, adding that markets „are going to go up and they're going to go down. But you know what, we have to rebuild our country“.

But Nicole Inui at HSBC wrote in a note: „The back and forth on tariff announcements is playing havoc with consumer and business confidence: policy uncertainty is at a record high, consumer confidence dropped sharply and small business optimism has pared back.

“Consensus GDP forecasts were revised