Asian technology stocks surged on Tuesday as investors responded to former US president Donald Trump’s decision to pause tariffs on Canadian and Mexican exports.
The move temporarily relieved market concerns over escalating trade tensions, leading to sharp gains in semiconductor, electronics, and AI-linked stocks across Japan, South Korea, and China.
The gains followed a volatile session in global markets, with US equities reversing some of their losses on Monday.
Asian stocks, particularly those exposed to the global semiconductor supply chain, responded positively, as fears of trade disruptions eased.
Japanese chipmakers Advantest and Lasertec led the rally, climbing 5% and 4.81%, respectively. Tokyo Electron gained 2.82%, Renesas Electronics advanced 2.99%, and tech conglomerate SoftBank Group rose 1.53%.
In Taiwan, TSMC and Foxconn recorded gains of 2.8% each, reinforcing investor optimism that supply chain disruptions would not worsen in the near term.
South Korean technology stocks also performed well, with Samsung Electronics climbing 4.13%, while SK Hynix posted a modest 0.63% increase.
Chinese AI and EV stocks gain despite broader US tariff risks
Chinese technology and AI-focused stocks saw significant gains, even as broader trade tensions between China and the US remained unresolved.
Tencent’s shares in Hong Kong rose 3.07%, while Alibaba gained 3.09%.
Cloud services firm Kingsoft Cloud soared 7%, and electric vehicle (EV) makers also saw sharp increases—BYD rose 4.22%, Li Auto gained 9.35%, and Xpeng surged 14.46%.
Meituan, one of China’s largest e-commerce platforms, saw its stock climb 5.06% as sentiment improved around global trade flows.
The rise in Chinese AI-linked stocks came as Beijing pushed forward with its domestic AI development plans, despite facing continued US restrictions on semiconductor exports.
These gains came amid speculation that Trump’s move to delay tariffs on Canada and Mexico was a strategic signal to China.
Reports indicated that he planned to speak with Chinese President Xi Jinping later in the week, raising expectations that negotiations between the world’s two largest economies might resume.
However, with new US tariffs on Chinese goods still set to take effect, investors remained cautious.
US-China tensions continue to cloud global semiconductor image
The semiconductor sector, which has been at the centre of US-China trade tensions, remained highly sensitive to policy changes.
While the tariff pause on Mexico and Canada was a relief for Asian markets, the semiconductor industry remains vulnerable to ongoing US trade restrictions against Chinese tech firms.
China’s push for self-sufficiency in semiconductor technology has led to increased investment in domestic AI and chip companies, creating an alternative to US-led supply chains.
Last week, the launch of Chinese startup DeepSeek’s free, open-source language model put pressure on US and South Korean AI firms, reflecting Beijing’s growing ambitions in the sector.
Meanwhile, Samsung Electronics and SK Hynix have faced headwinds from higher costs and shifting demand trends.
Samsung’s fourth-quarter earnings missed estimates, which had led to a decline in its stock price last week. However, Tuesday’s gains signalled renewed investor confidence in South Korea’s technology sector.
Despite the rally, analysts warned that uncertainty over US trade policy remained a key risk. With Trump’s tariff policies often shifting unpredictably, investors are bracing for potential further disruptions to global supply chains.
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