A record drop in the Asian stock market was recorded on Monday, since an upsurge in the US-China trade war became a reason of worry among investors.
US President Donald Trump introduced traffic hikes on all of imports from China to the US. The announcement was seen as a consequence to Beijing’s plan to order duties and rise in tariffs on US imports into China.
On Friday, US announced to raise tariffs of $250bn (£203.8bn) on Chinese imports of about 25% to 30%. This plan will come into action since October 1. The US also added new tariff rates on $300bn of Chinese goods, which will now function at a rate of 15% instead of the earlier 10%. Reports allege, a first lot of the new tariffs will be launched in September.
While in China, Hong Kong’s Seng index sank 3.2%, Shanghai Composite went up to 1.3%. Records also suggest Japan’s significant Nikkei index went down to 2.3%. Chinese Yuan also dropped to a record 11-year low in comparison to the US dollar.
Previous reports also suggest that a substantial decline in the Chinese Yuan also made US label China as a ‘currency manipulator’. This development further added to the tension between the two nations.
“The trade war between the US and China has escalated dramatically,” commented Louis Kuijs, head of Asia Economics at Oxford Economics. “This tit-for-tat escalation shows how unlikely a trade deal and de-escalation have become.”