Chinese stocks were thrown into a tailspin on Friday after Beijing announced 34% tariffs on all imports from the US, a retaliatory move that risks bringing a halt to a nascent market recovery in China.
Futures contracts tracking the FTSE China A50 Index fell about 3.5% in Singapore, after China said all imports from the US will be charged the extra levies starting April 10. The measure came after US President Donald Trump on Wednesday laid out reciprocal tariffs on global trade partners, including a 54% rate on Chinese goods.
US-listed shares of Chinese companies suffered heavy losses across the board in trading before the New York open, with e-commerce firms Alibaba Group Holding Ltd. and JD.com Inc. declining over 9% each. The exchange-traded KraneShares CSI China Internet Fund declined as much as 9.6% in premarket trading, before paring losses.
Chinese stocks have outperformed global peers this year amid growing optimism over the country’s technological breakthrough in artificial intelligence. The MSCI China Index has risen 14% year-to-date, compared with an 8.3% drop in the S&P 500 Index.
The Chinese stock market had been resilient despite the rising trade tensions, as investors bet that external pressures will force policymakers to ramp up economic support to domestic consumers. The CSI 300 Index declined by only 0.6% on Thursday amid a rout in global equities. Both mainland and Hong Kong markets are closed on Friday for a public holiday.
