SHANGHAI, CHINA – AUGUST 14, 2025 – Tourists are visiting the Bund in Shanghai, China on August 14, 2025.
Cfoto | Future Publishing | Getty Images
Asia-Pacific markets fell Monday after China and the U.S. tightened trade restrictions and traded fresh accusations, renewing tensions between the world’s two largest economies.
Hong Kong’s Hang Seng index declined 2.22%, while mainland China’s CSI 300 traded 2.73% lower.
The offshore Chinese yuan strengthened 0.1% to 7.1267 against the greenback. The 10-year China government bond yield lost more than 5 basis points to 1.752%.
China on Sunday said “we are not afraid of” a trade war with the United States after President Donald Trump vowed to impose punishing new retaliatory tariffs on Chinese imports.
A spokesperson for China’s Ministry of Commerce accused the U.S. of a “textbook double standard” with Trump’s promise on Friday to tack on additional 100% tariffs on those imports after China imposed new export controls on rare earths minerals.
The recent policy announcements may signal that China intends to push for greater concessions from the U.S., Goldman Sachs wrote in a note Sunday.
China’s imports in September rose 7.4% year on year in dollar value terms, compared to the 1.3% rise in August. Its exports jumped 8.3%, higher than July’s 4.4% climb.
Australia’s ASX/S&P 200 lost 0.68%. South Korea’s Kospi plunged 2.35%, and the small-cap Kosdaq declined 2.24%.
Singapore’s benchmark index fell as much as 1.5%.
Japan markets are closed for the holidays.
In a Truth Social post on Sunday, Trump suggested to investors the president may not follow through on his threat to post a “massive increase of tariffs” on China.
That comment on Friday brought the U.S. trade war with China back to the fore, and sent stocks tumbling in a rout that wiped out $2 trillion in market value.
“Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I,” Trump wrote. “The U.S.A. wants to help China, not hurt it.”
On Friday stateside, the three U.S. major averages declined.
Stocks accelerated selling into the close, with the Dow Jones Industrial Average closing down 878.82 points, or 1.9%, at 45,479.60. The S&P 500 lost 2.71% to settle at 6,552.51, while the Nasdaq Composite fell 3.56% to 22,204.43. The broad-based index’s decline was the largest since April 10.