Markets spooked by warnings
Stocks fall as China threatens trade war with US
China is prepared to defend its interests
Stock markets in Asia fell overnight amid escalating fears of a trade war between the US and China.
Beijing warned the US against imposing tariffs on up to $60 billion (£42.5bn) of imports from China, saying it would retaliate.
In a statement, the Chinese ministry of commerce said: “China doesn’t hope to be in a trade war, but is not afraid of engaging in one.”
China may impose $3 billion ($2.4 billion) in tariffs on a range of US products.
Hong Kong’s Hang Sen was down 2.8% and Shanghai shares 3.3%, and the sell-off spread across the Asia-Pac region as other economies were poised to be caught up in the supply chain. Japan’s Nikkei was down 4.1% and Australian stocks 2.1%. South Korea was 2.3% lower.
Some US industrialists and farmers who have built strong trading links with China were concerned that President Trump’s measures will undo much of their hard work.
The proposed tariffs by China include a 15% levy on fresh fruit, nuts and wine valued at $1 billion. This mirrors the US duty hike of 15% on aluminium.
A 25% US steel duty may be met with a similar tariff on pork and aluminium scrap, the Commerce Ministry said.
A total of 128 US products have been identified for tariffs if the two sides cannot come to an understanding.
“If a trade war were initiated by the US, China would fight to the end to defend its own legitimate interests with all necessary measures,” said the Commerce Ministry.