Asian markets were rocked on Friday after Donald Trump moved forward with plans to impose tariffs on up to $60bn (£42bn) of imports from China.
Under the terms of a presidential memorandum signed by Mr Trump, he will target the Chinese imports only after a 30-day consultation period, which gives industry lobbyists and members of Congress a chance to water down a list of proposed 1,300 products that could be targeted.
However, with investors fearing a global trade war, stocks dropped across Asia. Japan’s Nikkei fell 4.5 per cent, Hong Kong’s Hang Seng was down 3.1 per cent and South Korea’s Kospi fell 3 per cent. The FTSE also opened lower on Friday, down around 0.6 per cent.
This followed falling US markets Thursday, when the Dow dropped 2.9 per cent, the S&P 500 fell 2.5 per cent and the Nasdaq shed 2.4 per cent.
Mr Trump said the trade action was “the first of many”, while Chinese officials warned the US President that Beijing would be prepared to retaliate.
“China doesn’t hope to be in a trade war, but is not afraid of engaging in one,” the Chinese commerce ministry said in a statement.
Hannah Anderson, global market strategist at JP Morgan Asset Management, said: “The economic impact on both China and the US will be determined by what form the tariffs end up taking. The effects are likely to be felt more strongly in the US and will increase both consumer and producer prices.
“The equity market will bear the brunt of the market reaction. Most impacted will be the US, Korea, and Taiwan as companies domiciled in these markets make up a significant portion of the global production chain of Chinese exports.”
Additional reporting by news wires
