Asian stocks fall on Trump's tariff hike threat

Markets across Asia reacted in dismay, with Shanghai sinking 5.6 per cent and Shenzhen tumbling 7.4 per cent yesterday.
Markets across Asia reacted in dismay, with Shanghai sinking 5.6 per cent and Shenzhen tumbling 7.4 per cent yesterday. PHOTO: REUTERS

Asian stocks went into a tailspin yesterday as United States President Donald Trump threatened to hike tariffs on Chinese imports.

The surprise re-escalation in trade tensions comes days ahead of a Beijing trade delegation's arrival in Washington for trade talks.

Markets across Asia reacted in dismay, with Shanghai sinking 5.6 per cent and Shenzhen tumbling 7.4 per cent yesterday.

Singapore and Hong Kong shed around 3 per cent each, while Taiwan fell 1.8 per cent.

This comes after stock markets in Asia and the US had been rallying in recent months on trade optimism.

The threatened tariffs - which will see the current 10 per cent tariff on US$200 billion (S$272 billion) worth of Chinese goods go up to 25 per cent on Friday - would cover almost all Chinese exports to the US.

Observers noted that the pressure tactic could backfire.

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A version of this article appeared in the print edition of The Straits Times on May 07, 2019, with the headline 'Asian stocks fall on Trump's tariff hike threat'. Print Edition | Subscribe