Asia Stocks Fall as New US-China Tariff Fears Hit Markets
Asian stock markets declined broadly on Monday, with Hong Kong’s tech-heavy index leading losses. Renewed U.S. tariff threats and warnings of retaliation from Beijing reignited trade war fears, undermining investor confidence across the region.
Trump Softens Tone, But Markets Stay Nervous
On Sunday, President Donald Trump sought to ease market tension, posting on Truth Social, “Don’t worry about China, it will all be fine.”
The reassurance briefly lifted U.S. stock futures in early Asian trading, but regional equities remained weak as investors awaited signs of de-escalation in the ongoing trade dispute.
Hong Kong Leads Regional Losses
Hong Kong’s Hang Seng Index fell 2.3% on Monday, weighed down by heavy losses in major Chinese technology stocks. The Hang Seng TECH Index dropped over 2%, led by declines in Alibaba (HK:9988) and Tencent (HK:0700).
Mainland Chinese markets also moved lower, with both the Shanghai Shenzhen CSI 300 and the Shanghai Composite Index slipping nearly 1% each.
The sell-off followed Trump’s announcement on Friday of plans to impose 100% tariffs on all China-bound exports to the U.S., along with new export restrictions on critical U.S.-made software. The move came in response to China’s decision to restrict exports of key minerals, further fueling market volatility and fears of a slowdown in regional trade.
Beijing Warns of Countermeasures
In response, China’s Commerce Ministry stated over the weekend that the country “does not want a trade war but is not afraid of one.” Officials warned that “appropriate countermeasures” would follow if Washington moved ahead with new tariffs and accused the U.S. of double standards in its trade policy.
Investors remain cautious amid weak Chinese economic data and concerns about policy tightening in major global economies.
Mixed Moves Across the Region
Elsewhere in Asia, Japanese markets were closed for a public holiday, though Nikkei 225 futures rose 1.5% as the yen weakened following political turmoil in Tokyo. Candidate Sanae Takaichi’s bid to become Japan’s next prime minister suffered a setback after her coalition partner withdrew support last week.
South Korea’s KOSPI dropped 1.3%, while Australia’s S&P/ASX 200 lost 0.6%, and Singapore’s Straits Times Index declined 1%. India’s Nifty 50 futures edged slightly higher before market open.
