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Global stocks erased much of their gains on Tuesday after China retaliated against the US with tariffs on energy exports and Google.
A 10 per cent rise in tariffs on China came into force on Tuesday. President Donald Trump earlier halted tariffs on the US’s North American neighbours following a market rout on Monday over fears of a global trade contraction.
The pause on the levies on Canada and Mexico had injected hope into the market that a global trade war could be averted, but the US tariffs and Chinese response sent stocks lower.
Hong Kong’s Hang Seng was up as much as 3.3 per cent before erasing some of its gains to trade up 1.8 per cent. The offshore renminbi fell 0.1 per cent against the dollar to Rmb7.32.
Other Asian markets followed the same pattern. Japan’s exporter-heavy Nikkei 225 moderated its gains and was up 0.9 per cent after the deadline.
South Korea’s Kospi gained 1.2 per cent on Tuesday. Taiwan’s benchmark Taiex gained 0.4 per cent. Mainland China’s markets are closed until Wednesday.
American futures pointed to US stocks trading down. Contracts tracking the S&P 500 and Nasdaq were both down 0.2 per cent.
Prices for Brent crude oil, the international benchmark, dropped 0.7 per cent on Tuesday to $75,41 a barrel. West Texas International, the US benchmark, fell 1.7 per cent to $71.9 a barrel.
Trump’s 10 per cent rise in tariffs on China took effect, as have new policies aimed at ending the “de minimis” rule that exempts imports worth under $800 from US duties.
The US president is expected to speak to China’s leader Xi Jinping in the coming days.
