The Asian indexes have fallen after an unhelpful escalation in the US-China trade war rattled investors according to market insiders.
The falls are being directly attributed by market analysts to US President Donald Trump after he announced more tariff hikes on China last Friday [23 August] on what is now effectively all Chinese imports to the US in a puerile knee-jerk reaction toward Beijing after China said it was imposing fresh duties and raising tariffs on US imports into China.
The trade crisis is being directly attributed as the key catalyst behind the falls which saw Hong Kong’s Hang Seng index sliding by 3.2% while the Shanghai Composite fell by 1.3%. Meanwhile the Nikkei 225, Japan’s benchmark index, dropped 2.3% with the Chinese yuan weakening to a new 11-year low against the US dollar. The onshore yuan was around 7.15 per dollar in morning trading.
Sharp falls in the yuan earlier this month prompted the US to officially name China a “currency manipulator”, adding to further tensions between the two countries.
There is however some light at the end of the tunnel after Donald Trump announced yesterday [25th August] at the G7 in Biarritz that China had requested to “come back to the table” to thrash out the whole Sino-US tariff issue. If the proposed negotiations go ahead and do indeed lead to a more flexible approach to tariffs by both sides then it will go some way to hopefully stay a predicted “global recession.”