Asian shares stumble on threats of new US tariffs

Sydney — Most Asian share markets slipped on Monday amid reports Washington was about to announce a new round of tariffs on Chinese imports, setting the stage for possible reprisals by Beijing.

Liquidity was thin with Japan on holiday and moves in currencies and bonds were minor.

Hong Kong markets opened as normal after a super typhoon brushed the city on its way to landfall in China’s Guangdong, the country’s most populous province.

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1%, snapping three consecutive sessions of gains.

Shanghai blue chips fell 0.8%, while the Hang Seng shed 0.9%. E-mini futures for the S&P 500 were off 0.2%. US President Donald Trump is likely to announce new tariffs on about $200bn on Chinese imports as early as Monday, a senior administration official told Reuters.

The tariff level will probably be about 10%, the Wall Street Journal reported, below the 25% the administration had said it was considering.

The journal also reported Beijing may decline to participate in proposed trade talks with the US later this month if the Trump administration moves forward with the tariffs.

Other officials who advise the country’s leaders are suggesting China impose limits on the sale of parts and supplies needed by US businesses, using “export restraints” to threaten their supply chains.

“Further escalation looks very likely in which the rate will likely be raised to 25% and more US tariffs threatened, while China may potentially pull out of trade talks entirely and escalate on the new front of outright export restrictions,” wrote analysts at JPMorgan.

“This would of course only inflame the situation further.”

In currency markets the dollar index was a fraction firmer at 94.940, having bounced from a low of 94.359 at the end of last week.

The euro held at $1.1628 after retreating from a peak of $1.1721 on Friday, which also marks stiff chart resistance. The dollar was idling at ¥111.98 having run into offers around ¥112.15-¥112.20.

In commodity markets, gold was stuck at $1,194.70/oz and some way from last week’s top at $1,212.65.

Oil prices eased as the China-US trade dispute outweighed the risks to supply from upcoming sanctions on Iran. Brent dipped 4c to $78.06 a barrel, while US crude fell 8c to $68.91.

Reuters

Source: businesslive.co.za