Odds of more severe regional downturn raised significantly

S'pore may slip into technical recession as trade war grows: Analysts

(From left) US Treasury Secretary Steven Mnuchin, US Trade Representative Robert Lighthizer, Chinese Vice-Premier Liu He and Chinese Commerce Minister Zhong Shan at trade talks in Shanghai on Wednesday. PHOTO: REUTERS
(From left) US Treasury Secretary Steven Mnuchin, US Trade Representative Robert Lighthizer, Chinese Vice-Premier Liu He and Chinese Commerce Minister Zhong Shan at trade talks in Shanghai on Wednesday. PHOTO: REUTERS

United States President Donald Trump's surprise decision to escalate the ongoing trade war with tariffs on another US$300 billion (S$413 billion) of Chinese goods sent stock markets from Asia to Europe into a tailspin, and raised significantly the odds of a more severe downturn for the region.

Asian markets, which have yet to recover from Thursday's sell-off due to the US central bank shunning a lengthy easing cycle, lost further ground yesterday with Japan and Hong Kong tumbling more than 2 per cent, and Taiwan falling 1.7 per cent. Shanghai and Shenzhen each shed more than 1.4 per cent, while the Straits Times Index ended down 0.93 per cent.

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A version of this article appeared in the print edition of The Straits Times on August 03, 2019, with the headline 'Odds of more severe regional downturn raised significantly'. Subscribe