Asian Markets fall as the Trade War Escalates

The Asian and Pacific Rim markets were on the defensive on Tuesday as Asian and regional traders are increasingly worried. The world’s two largest economic superpowers continue to escalate their trade war. The trade war between the United States and China has intensified as the U.S. has announced new tariffs and China responded by ceasing all U.S. agricultural imports.

China also retaliated by sending the USD/CNH exchange rate over $7 for the first time since the global economic crises.

In Japan the Nikkei 225 was down 0.77 percent and the broader Topix index, in Tokyo, was down 0.65 percent.

In South Korea, the benchmark Kospi composite index fell 0.2 percent. Elsewhere in the Asian and Pacific Rim, the Australian S&P ASX 200 fell 1.98 percent.

In China, on the mainland, the headline indices were all lower by the afternoon. The Shanghai composite fell 2.43 percent. The smaller Shenzhen composite shed over three percent and the Shenzhen composite was down 2.65 percent.

In Hong Kong, the benchmark Hang Seng index was down 0.71 percent by the afternoon after falling over two percent earlier in the day.

Asian Traders Digest Increasing Trade Tensions between China and the U.S.

Trade tensions between China and the United States are dominating the headlines. Traders are growing increasingly pessimistic that the two economic giants will not sign a trade deal anytime soon. Both sides are escalating matters. This escalation, yesterday, led to the biggest selloff in the global equity markets this year.

Trade tensions started, anew, after President Donald Trump broke the trade war truce and announced a ten percent tariff against $300 billion of Chinese goods.

In response, companies in China will not import U.S. agricultural goods. This will lead Trump to retaliate even further as China is hitting him where it hurts the most and just ahead of the 2020 election. To make matters worse, yesterday, the U.S. Department designated China as a currency manipulator.