Asia-Pacific markets drop amid China-U.S. trade tensions

Hang Seng index shed 3.41%, CSI 300 traded 1.76% lower, ASX/S&P 200 slid 0.68%, Kospi slumped 2.35%, Kosdaq dropped 2.24%, while Singapore’s benchmark index slid 1.5%

Asia-Pacific markets dropped Monday after China and the U.S. tightened trade restrictions and traded fresh accusations, renewing tensions between the world’s two largest economies.

Hang Seng index shed 3.41%, while CSI 300 traded 1.76% lower.

The offshore Chinese yuan firmed 0.1% to 7.1267 against the U.S. dollar. The 10-year China government bond yield slipped more than 5 basis points to 1.752%.

China on Sunday said “we are not afraid of” a trade war with the U.S. after President Donald Trump vowed to impose 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 exports climbed at the fastest pace in six months in September, while imports logged their strongest gain in more than a year, even as a trade deal with the U.S. remains elusive.

Exports grew 8.3% in September in U.S. dollar terms from a year earlier, China’s customs data showed Monday.

ASX/S&P 200 slid 0.68%. Kospi slumped 2.35%, and the small-cap Kosdaq dropped 2.24%.

Singapore’s benchmark index slid 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.