Chinese stocks dropped after US President Donald Trump said he would impose an additional 10% tax on the Asian nation’s imports, a development that adds to investors’ worries about intensifying trade tensions.
A gauge of Chinese shares listed in Hong Kong slid as much as 1.2%. The onshore benchmark CSI 300 Index fell as much as 0.5%, on course to suffer its first weekly loss in a month.
The new US tariffs on China come on top of a 10% duty that took effect earlier this month, a move that is set to aggravate concerns about the world’s No. 2 economy that is already struggling with a property crisis and deflationary pressures.
Increased trade frictions also threaten to derail a nascent rally induced by optimism about Chinese artificial intelligence breakthroughs.
“The additional 10% tariffs introduce near-term risks but don’t significantly alter the current narrative around China markets which have been supported by AI broadly,” said Charu Chanana, chief investment strategist at Saxo Markets. “There could be an offset from expectations that tariffs could be a negotiating tool, and China’s administration has the stimulus tools to respond.”
