Stock markets in Asia have tumbled after the latest US tariff threat on China prompted Beijing to warn Washington of retaliation.
Hong Kong’s Hang Seng index lost 2.3%, the Taiwanese market fell by 1.4% and the Thai exchange dropped by 2%. In mainland China, the Shenzhen exchange fell by 1.4% and the Shanghai market slipped 0.4%. Japan’s Nikkei is closed.
Beijing has told the US it will retaliate if Donald Trump fails to back down on his threat to impose 100% tariffs on Chinese imports, prompting investors to brace for another bout of trade war turmoil.
China’s commerce ministry blamed Washington for raising trade tensions after the US president announced on Friday he would impose the additional tariffs on China’s exports to the US, along with new controls on critical software, by 1 November. The move followed new curbs on exports of important rare earth minerals by Beijing.
However, Trump and senior US administration officials opened a door to a China trade deal on Sunday when market futures showed another US stock market drop, but they have since bounced back and are now pointing to a higher open on Wall Street later. Trump wrote on Truth Social: ‘Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!’
Despite the trade tensions, Chinese exports bounced back in September, topping forecasts after the world’s second-largest economy diversified its markets. China’s exports rose by 8.3% year on year last month, according to customs data. This was the fastest growth since March, and beat a 6% increase forecast by economists polled by Reuters. It comes after a 4.4% increase in August.
Chinese imports growth jumped to 7.4%, from 1.3% in August. This came as a surprise given the recent signs of relatively weak domestic demand.
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