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The Asian market stumbled on Tuesday as the tension between US and China has been increasing since they started imposing tariffs on billions of dollars on each other products last Friday. There are deep concerns that a trade war is about to brew between the two largest economies in the world.

The overall Asian stocks traded lower than usual on Tuesday; with greater China markets extending their declines as investors are getting worried about China’s trade relationship with the US has reached soaring levels.

The Shanghai Composite fell 1.27% after reaching its lowest in the last session and the Shenzhen composite pulled back by 1.36%. Hong Kong’s Hang Seng Index fell by 3.08%. Other heavy financials that slumped are Tencent by 2.74% and HSBC 2.79%.

Other countries were also affected by this ongoing trade face-off between China and USA. Japan’s Nikkei 225 fell by 0.65% while South Korea’s Kospi fell by 0.37%. On the other hand, oil producers and airlines saw some gains, along with some other sectors as well.

As the market continues to watch the developments, investors are now beginning to worry as July 6th is drawing near; this is the day when the US will impose a 25% tariff on $34 billion worth of Chinese goods in not less than 800 categories. China has said the same tariff will be imposed on US goods as a sign of retaliation.

The chief economist at DBS Bank, Taimur Baig said that while a trade war is highly far from happening, the harsh rhetoric and punitive measures have reached such a point that certain measures have to consider in case of eventualities like these.

USA has also been engaged in trade issues with countries like the European Union and Canada. The European Union could impose tariffs on as much as $300 billion worth US goods if Trump imposes duties on European cars.