Chinese stocks tumbled sharply on Monday after Beijing retaliated against Washington’s tariff impositions, triggering renewed fears of an extended trade war between the world’s two largest economies.
At the time of filing this report, Hong Kong’s Hang Seng Index had dropped nearly 12 per cent, while the Shanghai Composite Index had fallen by about 8 per cent. If the trend sustains, these would mark the steepest single-day declines for the indices since the global financial crisis of 2008, according to reports.
A Reuters report indicated that shares of Chinese tech giants Alibaba and Tencent had plunged by over 10 per cent. Shares of Hong Kong-listed HSBC plummeted by 13 per cent, on track for their worst daily loss since 2009, while Standard Chartered saw a fall exceeding 16 per cent, placing it on course for a record decline.
The slump came in the wake of tit-for-tat tariff announcements between Beijing and Washington. United States President Donald Trump, in an aggressive escalation, slapped 34 per cent duties on Chinese imports. In a reciprocal move, China imposed tariffs of the same magnitude on US goods, fuelling fears of a trade conflict with long-term consequences.
Also read: BSE crash wipes out ₹20L crore in investor wealth
“China struck back at the U.S tariffs imposed by Trump with a slew of counter-measures including extra levies of 34 per cent on all U.S. goods and export curbs on some rare-earths, deepening the trade war between the world's two biggest economies,” said Manav Modi, Senior Analyst, Commodity Research at Motilal Oswal Financial Services Ltd.
President Trump, now into his second term, has consistently underscored the importance of tariff parity. “The United States will match tariffs imposed by other countries, including China, to ensure fair trade,” he has reiterated.
On 2 April, President Trump signed an executive order on reciprocal tariffs, mandating ad valorem duties between 10 and 50 per cent on imports from all trading partners. The base duty of 10 per cent is to take effect on 5 April 2025, with further country-specific tariffs beginning from 9 April.
“Globally, markets are going through heightened volatility caused by extreme uncertainty. No one has a clue about how this turbulence caused by Trump tariffs will evolve,” remarked V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The unfolding developments have left investors across Asia jittery, with concerns mounting over prolonged economic disruption if the two superpowers fail to reach a trade accord.
Follow us
