Chinese Stocks Plummet Amid Escalating US-China Trade Tensions

Chinese stocks experienced a dramatic decline due to retaliatory tariffs imposed by Beijing in response to U.S. tariffs, heightening fears of a prolonged trade war. The Hang Seng and Shanghai Composite Index dropped significantly. The confrontation further pressured global markets, signaling potential economic turbulence.

On Monday, Chinese stocks endured a significant decline following Beijing's decision to retaliate against the United States with new tariffs, escalating concerns about a long-lasting trade war between two major economies. At the time of reporting, the Hang Seng Index had fallen by approximately 12 percent, while the Shanghai Composite Index saw an 8 percent drop. These numbers, if sustained, would mark the largest single-day declines since the 2008 global financial crisis.

Reports from Reuters indicate that shares in major online corporations such as Alibaba and Tencent dropped by more than 10 percent. Furthermore, Hong Kong-listed shares of HSBC plunged 13 percent, en route to its steepest daily decline since 2009, with Standard Chartered experiencing a 16 percent dip, also heading for a record fall.

The new wave of reciprocal tariffs comes after U.S. President Donald Trump levied 34 percent duties on Chinese imports. In response, China announced similar tariffs on U.S. goods, fueling the trade conflict and affecting investor confidence. 'China struck back at the U.S. tariffs imposed by Trump with a slew of counter-measures, including extra levies of 34 percent on all U.S. goods and export curbs on some rare-earths, deepening the trade war between the world's two biggest economies,' commented Manav Modi, Senior Analyst at Motilal Oswal Financial Services Ltd.

In his second term, President Trump has reaffirmed his commitment to tariff reciprocity, insisting on matching tariffs imposed by other nations, including China, to secure fair trade. An executive order issued on April 2 by the U.S. President outlined reciprocal tariffs, including additional ad valorem duties ranging from 10 percent to 50 percent on global imports, effective from April 2025.

'Globally, markets are experiencing heightened volatility induced by enormous uncertainty. The trajectory of these market fluctuations prompted by Trump's tariffs remains unpredictable,' noted V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. (ANI)

(With inputs from agencies.)