Asian equity markets fell sharply on Monday after U.S. President Donald Trump threatened to impose additional tariffs on China. By the mid‑day break, Hong Kong’s Hang Seng Index had dropped 3.49 percent to 25,373.43, reflecting a substantial loss. The decline was sparked by Trump’s Friday announcement that he was considering a 100 percent tariff on Chinese goods and might cancel a summit with President Xi Jinping. He cited China’s export restrictions on rare‑earth minerals—essential for smartphones, electric vehicles and military hardware—as the primary reason.
U.S.–China trade tensions have been intensifying, with both sides levying tariffs on each other’s products. Currently, Chinese goods face a 30 percent U.S. tariff, while Beijing has responded with a 10 percent tariff. Trump’s latest threat heightened fears of a broader trade war between the two economic superpowers. The sell‑off was not confined to Hong Kong; Shanghai’s Composite Index fell 1.4 percent, and markets in Sydney, Singapore, Seoul, Taipei and Manila also posted notable declines.
Investors found some relief after Trump’s Sunday remarks, in which he expressed respect for President Xi and said the United States aims to help—not harm—China. The softer tone helped U.S. futures rebound, climbing more than one percent. Safe‑haven assets rose as well: gold hit a new record of $4,060 per ounce, and oil prices recovered after Friday’s dip, which had been partly driven by the Israel‑Hamas peace deal that eased Middle‑East supply concerns.
Analysts think the tariff threat may be short‑lived, viewing it as posturing ahead of the November 1 meeting when the current tariff truce expires. The looming U.S. government shutdown could also dampen domestic consumer sentiment, making it less likely that Trump will pursue further foreign‑policy escalation until internal issues are resolved.
Investors remain cautious, closely monitoring developments in U.S.–China trade relations and their potential impact on the global economy. Key market figures at 02:30 GMT showed the Hang Seng down 2.2 percent at 25,705.25, the Shanghai Composite down 1.4 percent at 3,842.20, the euro/dollar at $1.1626, the pound/dollar at $1.3361, and the dollar/yen at 151.88 yen. West Texas Intermediate crude rose 1.7 percent to $59.92 per barrel, Brent crude up 1.6 percent to $63.74 per barrel. The New York Dow closed down 1.9 percent at 45,479.60, and London’s FTSE 100 fell 0.9 percent to 9,427.47.
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