Hang Seng Index, CSI 300, U.S.-China trade tensions

Asia-Pacific markets fell on Monday after China and the United States tightened trade restrictions and renewed tensions between the world’s two largest economies with new accusations.

China on Sunday said “we are not afraid” of a trade war with the United States after President Donald Trump vowed to impose punitive new retaliatory tariffs on Chinese imports.

China’s spokesman Ministry of Commerce Trump accused the United States of “textbook double standards” on Friday after China imposed new export controls on rare earth minerals, vowing to impose 100% additional tariffs on those imports.

Goldman Sachs wrote in a note on Sunday that recent policy announcements could signal that China intends to seek greater concessions from the United States.

Australia’s ASX/S&P 200 lost 0.68%. South Korea’s Kospi index lost 2.35%, while the small-cap Kosdaq lost 2.24%.

Hong Kong futures Hang Seng Index It marked a lower open, trading at 24,968 compared to the index’s previous close of 26,290.32.

Japanese markets are closed for holidays.

In a post on Truth Social on Sunday, Trump suggested to investors that the president may not follow through on his threat of a “massive tariff increase” against China.

Friday’s comments brought the U.S. trade war with China back to the fore and led to a rout in stocks that wiped out $2 trillion in market value.

“Don’t worry about China, everything will be fine! The highly respected President Xi had a bad moment. He doesn’t want a depression for his country, and neither do I,” Trump wrote. “The United States wants to help China, not harm it.”

Three major US averages fell on Friday.

Stocks accelerated selling toward the close, with the Dow Jones Industrial Average falling 878.82 points, or 1.9%, to close at 45,479.60. The S&P 500 index decreased by 2.71% to 6,552.51 points, and the Nasdaq Composite index decreased by 3.56% to 22,204.43 points. The decline in the broad-based index was the largest decline since April 10.