Asian stocks fall as Trump revives tariff tensions with China

Asian equity markets tumbled on Monday after US President Donald Trump reignited trade tensions with China by threatening to impose 100 percent tariffs on Chinese goods. The move revived fears of a renewed trade war between the world’s two largest economies, rattling global investors.

Trump’s threat, announced on social media Friday, came in response to Beijing’s export restrictions on rare earth minerals — key materials used in smartphones, electric vehicles, and defense equipment. The president warned that additional tariffs, along with export controls on “any and all critical software,” would take effect on November 1.

“There is no way that China should be allowed to hold the world captive,” Trump declared, accusing Beijing of “extraordinarily aggressive” economic policies. Currently, Chinese products face a 30 percent US tariff, while China’s retaliatory duties stand at 10 percent.

Markets reacted sharply: Hong Kong’s Hang Seng Index fell more than 2 percent, Shanghai slipped over 1 percent, and losses were also seen in Seoul, Taipei, Singapore, Sydney, and Manila. The selloff followed Wall Street’s decline Friday, when the Nasdaq dropped more than 3 percent amid investor fears of a tech bubble.

However, sentiment improved slightly after Trump adopted a softer tone on Sunday, calling Chinese President Xi Jinping “respected” and saying the US “wants to help China, not hurt it.”

China’s Ministry of Commerce swiftly condemned the tariff threat, labeling it a “typical example of double standards” and warning that “threatening high tariffs at every turn is not the right approach to engaging with China.”

Analysts say the renewed confrontation may be short-lived. “Both sides appear to be posturing ahead of their November 1 meeting when the tariff truce is set to expire,” said Morningstar’s Kai Wang. He added that the ongoing US government shutdown is already weighing on domestic sentiment, making it unlikely that Trump would escalate tensions further before resolving internal issues.

Meanwhile, gold continued its climb as investors sought safety, hitting a new record high of $4,060. Oil prices also rebounded after Friday’s slump, recovering amid easing concerns over Middle East supply following the Israel-Hamas peace deal.

Key figures at around 0230 GMT

Hong Kong - Hang Seng Index: DOWN 2.2 percent at 25,705.25
Shanghai - Composite: DOWN 1.4 percent at 3,842.20
Tokyo - Nikkei 225: Closed for a holiday
Euro/dollar: UP at $1.1626 from $1.1615 on Friday
Pound/dollar: UP at $1.3361 from $1.3352
Dollar/yen: UP at 151.88 yen from 151.57 yen
Euro/pound: UP at 87.01 pence from 86.98 pence
West Texas Intermediate: UP 1.7 percent at $59.92 per barrel
Brent North Sea Crude: UP 1.6 percent at $63.74 per barrel
New York - Dow: DOWN 1.9 percent at 45,479.60 (close)
London - FTSE 100: DOWN 0.9 percent at 9,427.47 (close)