Asian markets and the dollar were jolted Wednesday as news that Donald Trump’s top economics adviser had resigned revived trade war fears, while early excitement at North Korea’s offer of denuclearisation talks fizzled out.Investors already on edge over expected US interest rate rises have been rattled further since the US president last week unveiled plans for controversial tariffs on steel and aluminium imports as part of his “America First” agenda. Equities initially plunged on Thursday’s announcement, which has been condemned by business leaders and foreign governments, before rebounding this week as dealers bet that the final measures would not be as bad as initially thought.However, analysts said news that Gary Cohn — who had fought against the tariffs — had stepped down could leave the field open for protectionist hawks to dictate policy, ramping up the chances of a global trade war. “His resignation increased the risk tenfold that President Trump will follow through with far-reaching trade tariffs given that Cohn was said to be remaining in his role to convince Trump to reverse his trade policy views, or at least temper them,” said Stephen Innes, head of Asia-Pacific trading at OANDA.“While the world appears to be in a safer place this morning due to the denuclearisation olive branch offered by North Korea, the market is no less safe from the wrath of Trump’s trade policies.” US bond yields sank as traders rushed into safe assets, with the dollar falling against its major peers as well as high-yielding currencies as traders bet that any trade war would hurt the US unit.“Policy uncertainty has underpinned a lot of the market’s recent volatility,” Stephen Wood, chief market strategist for North America at Russell Investments in New York, told Bloomberg News. “This speaks to the instability. He’s (Cohn) an advocate for free-trade policy so there would be expectation that protectionist voices would be more representative in the administration.”Olive branch Regional equities swung through the morning, with sentiment improved by Pyongyang’s olive branch to South Korea and the US — saying it was open to discussing its nuclear programme.Seoul announced the two Koreas would hold a historic summit next month — and that the North’s leader Kim Jong Un was ready to suspend provocative missile and nuclear tests while sitting down for dialogue.Trump, who has said the US would not talk unless Kim was prepared to give up his weapons, welcomed the breakthrough offer.“It’s important for markets for a number of reasons,” said Greg McKenna, chief market strategist at AxiTrader. “It reduces a point of tensions between the US and China and could lead to more… cooperation as President Trump seeks to rebalance the US-China trade deficit.”However, investors were unable to maintain the momentum and Seoul reversed its morning course to end 0.4 percent down, though the won held its gains.Tokyo closed down 0.8 percent, with Kobe Steel plunging 7.4 percent a day after its CEO resigned — leaving no successor — after the firm revealed widespread submission of false strength and quality data for products shipped to hundreds of clients worldwide.Hong Kong shed one percent and Shanghai closed down 0.6 percent, with Taipei 0.4 percent off.Sydney dropped one percent as data showed Australia’s economic growth slowed in the final three months of last year and missed expectations. Singapore also shed one percent, while Bangkok, Jakarta and Mumbai tumbled.In early European trade London and Frankfurt each sank 0.4 percent, while Paris fell 0.3 percent.Key figuresSeoul – KOSPI: DOWN 0.4 percent at 2,401.82 (close)Tokyo – Nikkei 225: DOWN 0.8 percent at 21,252.72 (close)Hong Kong – Hang Seng: DOWN 1.0 percent at 30,196.92 (close)Shanghai – Composite: DOWN 0.6 percent at 3,271.67 (close)London – FTSE 100: DOWN 0.4 percent at 7,117.30Euro/dollar: UP at $1.2427 from $1.2408 at 2200 GMTPound/dollar: UP at $1.3900 from $1.3891Dollar/yen: DOWN at 105.64 yen from 106.17 yenOil – West Texas Intermediate: DOWN 52 cents at $62.08 per barrelOil – Brent North Sea: DOWN 52 cents at $65.27New York – Dow: FLAT at 24,884.12 (close).Published in Daily Times, March 8th 2018.