The Trump administration’s latest shot in the trade war with China has sent shudders through Chinese financial markets.
The US government said it was readying new tariffs of 10% on $200 billion worth of Chinese goods, releasing a list including fruit and vegetables, handbags and baseball gloves.
The Shanghai Composite fell 1.9% and Hong Kong’s Hang Seng was down 1.4% Wednesday. China’s currency, the yuan, fell about 0.5% against the dollar.
Other markets were also down: Japan’s Nikkei slid about 1%, and Dow futures were pointing 0.7% lower.
China’s stock market is one of the worst performing in the world in 2018, weighed down by fears of a slowdown in the country’s economy and the trade clash with the United States. The Shanghai index entered a bear market at the end of last month, meaning it has fallen more than 20% from its recent peak.
Among the Chinese stocks caught in the crossfire Wednesday were companies with strong ties to the US market. Shares in major household appliances maker Qingdao Haier dropped more than 3%. The new US list targets products including refrigerators and air-conditioning units.
The US announcement comes just days after the United States and China imposed tariffs of 25% on $34 billion of each other’s exports.