Asian markets tremble after Trump’s tariff threats
By 2.40pm, Beijing time, the Shanghai Composite Index had plunged by 5.73% while the Shenzhen Composite Index dived 7.14%, and Hong Kong’s Hang Seng Index sank 3.24%.
Two deadly tweets from United States (US) president Donald Trump threatening to boost tariffs on China sent Asian markets nosediving on Monday, as investors take their bets off the table on fears that the trade talks between China and the US could take a turn for the worse.
By 2.40pm, Beijing time, the Shanghai Composite Index had plunged by 5.73% or 176.41 points, to 2,901.93. Smaller board the Shenzhen Composite Index dived 7.14% or 116.86 points, to 1,519.73.
Hong Kong’s Hang Seng Index sank 3.24% or 975.23 points, to 29,106.32 while Singapore's Straits Times Index fell by 3.17% or 107.40 points, to 3,284.89. Japan is closed for a public holiday.
On Sunday, Mr Trump tweeted that the current tariffs on US$200 billion worth of Chinese goods will rise to 25% on Friday, from the previous 10%. The US president also threatened to tax an additional US$325 billion worth of untaxed goods at 25%.
‘The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!’ he had said in his Twitter post.
Mr Trump’s tweet response arrived after US trade representative Robert Lighthizer updated him with details that China was pulling back from previous commitments.
On Monday, sources told The Wall Street Journal and CNBC that China’s vice premier Liu He will likely cancel the trip planned for himself and a 100-person delegation for a round of trade talks this week. Observers had been speculating on a possible deal breakthrough from this week’s talks prior to the changes this week.
In a latest update, a source told South China Morning Post the vice premier will still travel to the US this week for trade talks, but will be shortening the trip instead.
An escalation in the trade war will impact Asia markets as the supply chains for the produce of goods or the manufacturing of goods among the countries are interconnected.
Markets had been expecting a deal to take place soon, with no additional conflict between both parties as both sides had seemed to be having amicable discussions.
Wall Street’s stock index futures fell sharply on Sunday after Mr Trump’s recent comments on the US-China trade war.
The S&P 500 e-minis fell 40 points or 1.36%, with 93,139 contracts changing hands while the Dow e-minis fell by 358 points, or 1.35%, with 14,154 contracts changing hands.
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