Asian stocks stumbled overnight after the US escalated its trade war with China, with a series of fresh tariff hikes on goods amounting to roughly $110bn (£90.5bn).
Tokyo’s Nikkei index fell 0.41 per cent, while Hong Kong also fell 0.76 per cent. Shanghai’s SSE Composite index rose 1.31 per cent, however, while South Korea’s main index was down 0.13 per cent.
Washington slapped 15 per cent tariffs on a variety of Chinese goods on Sunday – including footwear, smart watches and flat-panel televisions. Beijing, meanwhile, imposed new duties on US crude, the latest escalation in the damaging trade war.
In retaliation, China has also imposed tariffs on some of the US goods on a $75bn target list. Beijing did not specify the value of the goods that face higher tariffs from Sunday.
Markets were not affected as strongly by this weekend’s tariff hike as they have been by previous increases. Investors are still hoping trade talks take a step forward this month, despite warnings from analysts that the fight over trade and tech is unlikely to find a resolution
US President Donald Trump has said the two countries will hold talks in September, but there are doubts that would lead to a breakthrough.
“So far Trump appears defiant though on the tariff hikes, blaming the Fed and American companies for their difficulties in dealing with the tariffs,” said Shane Oliver, chief economist at AMP in Sydney.
“There is a long way to go though and re-establishing trust will be difficult after the experience since mid-last year. Share markets may still have to fall further to pressure Trump to resolve the issue.”
Oil prices also fell on Monday. Brent crude futures fell as much as 0.77 per cent overnight, before recovering to around 0.1 per cent down.