Tokyo’s Nikkei 225 index initially dipped more than 4%, but recovered slightly. It was down 2.9% at 34,675.97.

The market dip comes as Trump said he was imposing a 24% “reciprocal tariff” on Japan, one of the United States' closest allies.

South Korea, also an ally, was hit with a 25% tariff. Its benchmark Kospi slumped 1.5% to 2,468.97.

Hong Kong's Hang Seng lost 1.4% to 22,887.03, while the Shanghai Composite index edged less than 0.1% lower, to 3,348.67.

The announcement came as a “major shock,” Yeap Junrong of IG said in a commentary. “China, in particular, was hit with an additional 34% tariff, bringing its total tariff burden to 64% when accounting for previous measures.”

However, losses might be blunted by expectations of further economic stimulus from Beijing to offset the impact of the higher tariffs.

In Australia, the S&P/ASX 200 fell 1.3% to 7,830.30.

Related

In the US, the future for the S&P 500 dropped 3% while that for the Dow Jones Industrial Average lost 2%, auguring potential losses when US markets reopen on Thursday.

On Wednesday, US stocks whipped through another dizzying day before Trump’s unveiling of his “Liberation Day” tariffs.

The S&P 500 rose 0.7% to 5,670.97 after careening between an earlier loss of 1.1% and a later gain of 1.1%. It’s had a pattern this week of opening with sharp drops only to finish the day higher.

The Dow Jones Industrial Average added 0.6% to 42,225.32, and the Nasdaq composite climbed 0.9% to 17,601.05.

Related

Elon Musk’s Tesla helped knock the market around after initially falling more than 6% following a report that it delivered fewer electric vehicles in the first three months of the year than it did in last year’s first quarter. It closed 5.3% higher.

Tesla is one of Wall Street’s most influential stocks because of its immense size, and it’s faced backlash due to anger about CEO Elon Musk’s leading the US government’s efforts to cut spending.

Related

On Wall Street, Newsmax fell 77.5% in its third day of trading to give back some of the meteoric gains from its debut at the start of the week. It surged 735% Monday and then another 179% on Tuesday.

Several airlines, meanwhile, flew higher to recover some of the sharp losses taken recently on worries that tariff-weary customers will fly less. United Airlines climbed 4.6%.

Financial markets around the world have broadly been shaky lately because of uncertainty about Trump’s trade war. He has said he wants tariffs to make the global system more fair and to bring manufacturing jobs back to the United States from other countries. But tariffs also threaten to grind down growth for the U.S. and other economies, while worsening inflation when it may be stuck above the Federal Reserve’s 2% target.