Shares tumbled in Asia early Monday after President Donald Trump threatened in a tweet to impose more tariffs on China, spooking investors who had been expecting good news on trade.
The Shanghai Composite index sank 4.9%, briefly dipping 5% lower, and the Hang Seng in Hong Kong plunged 3.5%. Markets were closed in Japan. The future contract for the Dow Jones Industrial Average fell 1.9% to 25,996.00, while that for the S&P 500 also shed 1.9%, to 2,892.00.
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Shares also fell sharply in Taiwan, Singapore, Australia and Indonesia.
Trump’s comments came a Chinese delegation was due to resume talks in Washington on Wednesday aimed at resolving a tariffs battle that has rattled world markets.
Apparently catching Beijing by surprise, Trump said he would raise import taxes on $200 billion in Chinese products to 25% from 10%.
The Wall Street Journal, citing unidentified sources, said China’s government was considering canceling this week’s talks.
“Arguably, Trump’s threat to lift tariffs ‘shortly’ if Beijing does not play ball on US trade demands, may be more a negotiations tactics than an imminent trade action,” Mizuho Bank said in a commentary.
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“Nonetheless, Trump’s tweet allusions to tariffs being ‘partially responsible for … great (US) economic results’ does raise the threat of misguided trade policy” from the U.S, it said.
