AFP-Jiji HONG KONG (AFP-Jiji) — Asian markets extended a global sell-off Tuesday following hefty losses on Wall Street that came in response to China’s hike in tariffs on $60 billion of U.S. imports, ramping up tensions in a trade war between the global economic titans.
The move by Beijing was followed by a warning of further action such as dumping U.S. Treasuries and came days after Washington more than doubled levies on $200 billion of Chinese goods and U.S. President Donald Trump said he was looking at more than $300 billion more.
The standoff has sent shockwaves through trading floors, where most dealers had a little over a week ago been confident the two sides were close to a deal.
World markets have rallied for most of the year on the back of optimism about an agreement.
In early trade, Hong Kong led losses as the market reopened after a long weekend. The Hang Seng Index sank 1.7 percent while Shanghai shed 0.2 percent and Tokyo was off 0.7 percent at the break.
Sydney and Singapore each dropped more than 1 percent, with Manila and Jakarta both down 1.6 percent. There were also losses in Taipei and Wellington, though Seoul edged up slightly.
“Uncertainty and short-term sentiment impact is likely to stay,” Medha Samant, director of investment at Fidelity International, told Bloomberg TV. “In the short term, it looks like volatility is here to stay and we could see this risk-off, risk-on going on for a long time.”
The retreat came after the Nasdaq on Wall Street suffered its worst day of 2019 and the Dow ended at its lowest point in more than three months.
After announcing the higher tariffs, the editor of Communist Party-owned Chinese newspaper Global Times warned Beijing could also hit the United States by offloading Treasuries, ending U.S. agricultural purchases and reducing orders for Boeing airplanes.