China, Hong Kong Stocks Plunge as Beijing Retaliates Against Trump Tariffs
Chinese and Hong Kong equities fell sharply on Monday after Beijing unveiled sweeping retaliatory tariffs in response to new U.S. trade measures, reigniting fears of a prolonged economic conflict between the world’s two largest economies.
China’s blue-chip CSI 300 index dropped nearly 6%, while the Shanghai Composite also slid 6%, with both benchmarks hitting their lowest levels since late September 2024.
In Hong Kong, the Hang Seng Index plunged 8.8%, marking its steepest decline since early February. Technology and export-oriented companies led the sell-off, reflecting investor concern over rising trade barriers.
Market tensions escalated last week after U.S. President Donald Trump imposed an additional 34% tariff on Chinese imports, on top of existing 20% duties. Trump also confirmed a 25% tariff on imported vehicles and auto parts, set to take effect on April 9.
In a swift response, Beijing imposed a 34% tariff on a wide range of U.S. goods, including agricultural products, energy exports, and key technology components, signaling a hardening of its stance.
“After earlier restrained responses to fentanyl-related tariffs that had left room for negotiations, it now appears that a second trade war is in full swing,” analysts at ING wrote in a recent note.
In Hong Kong, the Hang Seng Index plunged 8.8%, marking its steepest decline since early February. Technology and export-oriented companies led the sell-off, reflecting investor concern over rising trade barriers.
Market tensions escalated last week after U.S. President Donald Trump imposed an additional 34% tariff on Chinese imports, on top of existing 20% duties. Trump also confirmed a 25% tariff on imported vehicles and auto parts, set to take effect on April 9.
In a swift response, Beijing imposed a 34% tariff on a wide range of U.S. goods, including agricultural products, energy exports, and key technology components, signaling a hardening of its stance.
The tit-for-tat measures have rattled global markets and deepened concerns over a broader slowdown in international trade.
“After earlier restrained responses to fentanyl-related tariffs that had left room for negotiations, it now appears that a second trade war is in full swing,” analysts at ING wrote in a recent note.
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