
Chinese stocks fell after US President Donald Trump said his threat to impose 10% tariffs on the nation’s goods was still being considered and may take place next month.
The benchmark CSI 300 Index headed for its first decline in five days after Trump said tariffs on the country were being weighed due to “the fact that they’re sending fentanyl to Mexico and Canada.” Still, the 10% level is lower than the potential levies of 60% on all Chinese products that Trump pledged during his election campaign.
“It only gets tougher from here,” said Xin-Yao Ng, an investment director at abrdn plc in Singapore. “It’s a reminder that Trump will do something, because the first day might have given some the false impression that he might not. More gradual tariffs might also delay or reduce the force of stimulus that the market wants.”
The CSI 300 Index slipped as much as 1.3%, while the Hang Seng China Enterprises Index, which tracks mainland stocks listed in Hong Kong, fell 1.6%. The yuan led declines in Asian currencies following Trump’s China comments, with the onshore and offshore currencies both weakening 0.2% against the dollar.
There remains plenty of uncertainty about Trump’s plans for China tariffs, including whether the 10% he flagged Tuesday would be on top of the 60% he threatened earlier.
On the first day of his new term Monday, the President held off on ordering any new China-specific levies, even as he said he intended to hit Canada and Mexico with 25% tariffs by Feb 1. The absence of any China measures on his inauguration day was greeted with relief by investors with the MSCI China Index climbing 0.7% Tuesday.