Asian markets fell on Friday due to investor fears after an appeals court restored Trump’s tariffs, ending an earlier ban.

Beijing’s markets fell hardest after Treasury Secretary Scott Bessent said talks with China had stalled recently, hurting hopes for a lasting tariff deal.

Bloomberg reported that Shanghai’s Composite Index and the CSI 300 both slipped by around 0.6%, while Hong Kong’s Hang Seng fell 1.5%.

Bessent, speaking at a financial conference, acknowledged that high-level negotiations had lost momentum but said he remained “confident that talks will pick up again.”

His remarks, however, added to worries that Washington and Beijing might struggle to secure a more permanent trade deal. China objected to U.S. chip restrictions, while the U.S. added new export limits on major Chinese tech firms.

Earlier this month, the two sides agreed to pause their tit-for-tat tariff increases for 90 days, a truce set to expire in early July. Despite the temporary hold, high tariffs on Chinese goods kept imports expensive for U.S. buyers.

Regional stocks followed Wall Street, where markets closed well below their intraday peaks after the appeals court’s ruling.

President Trump denounced the initial decision that halted his tariffs and said he was “confident the Supreme Court will allow [the tariffs] to proceed.” He also hinted at exploring alternative legal routes to enforce the tariffs, many of which are slated to begin in July.

In Asia, S&P 500 futures eased 0.3% as traders prepared for the Fed’s preferred inflation report due later.

In Tokyo, the Nikkei 225 slid 1.3% and the Topix index dropped 0.7% after city data showed consumer prices climbed more than expected in May. This inflation figure could give the Bank of Japan added reason to consider raising interest rates. Many analysts are now eyeing a 25-basis-point rate increase as soon as July.

Other data showed Japan’s economy remained firm

Industrial output fell 0.8% in April, less than economists had forecast, while retail sales rose 1.2%, outpacing predictions. The stronger data helped push the yen higher, a move that weighed on exporters and further pressured equity markets.

In other parts of Asia, tech stocks fell as the initial boost from NVIDIA’s strong quarterly report wore off. South Korea’s Kospi declined 0.5% as local chipmakers and other tech firms reversed course. Singapore’s Straits Times dipped 0.3%.

Australia’s ASX 200 finished flat after weak retail sales led some to expect more RBA rate cuts. In India, Nifty 50 futures rose 0.1%, pointing to a stronger open as the index held just below 25,000.

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