Stock markets in Asia reacted despairingly to the trade spat that threatens to involve more countries.
As United States President Donald Trump makes good on his campaign promise to put "America First", the ramifications of his protectionist approach are being felt in major markets.
The Wall Street Journal reported that he plans to bar many Chinese companies from investing in US technology firms and block additional technology exports to China.
The news sent MSCI's All-Country World Index, which tracks shares in 47 countries, down on yesterday's early morning trade in Europe. The US stock futures - S&P 500, Nasdaq and Dow - were trading in red territories at 6.36pm in Singapore.
IG market strategist Pan Jingyi said: "Despite the Dow having broken the eight-session losing streak on Friday, the pressure looks to have returned at the start of the fresh week.
"Trade tension issues, whether it is between the US and China or other major trading partners such as the EU, will unfortunately likely retain their place in driving markets this week ahead of next week's keynote events, including the implementing of tariffs on Chinese imports by the US."
The Chinese central bank's pledge to cut the required reserve ratio for targeted banks by 50 basis points serves to cushion the downside of an economic slowdown amid rising trade tension.
"This will unlock as much as US$108 billion (S$147 billion) of liquidity into the economy, especially targeting those smaller companies which have poorer access to credit supply. This move comes after the crash in China's stock market last week, following escalating trade disputes with Washington," said CMC Markets Singapore market analyst Margaret Yang Yan.
In Singapore, the benchmark Straits Times Index opened at 3,279.53, but broke the key support at 3,300 to close at 3,260.84. This is down 0.81 per cent, or 26.56 points, from last Friday's close. Its next major support level is seen at around 3,200, Ms Yang said.
Singapore's listed telco players remained under pressure, following the debut of fourth telco MyRepublic. Singtel eased one cent to $3.11. StarHub also fell a cent to $1.63, while M1 lost five cents to $1.57 .
Banks led the laggards, despite most analysts' calls to buy on dips. DBS shed 23 cents to end at $26.66; United Overseas Bank dipped nine cents to $26.22; and OCBC lost 15 cents to close at $11.60.
