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The President confirmed tariffs of up to $60bn of imports from China

Asian markets have crashed overnight after President Trump announced US tariffs to be placed on Chinese imports.

Asian markets have suffered as a trade war between superpowers China and the US seems to be looming. Japan’s Nikkei fell 4.5% lower, Hong Kong’s Hang Seng declined by 2.4%, South Korea’s Kospi lost 3.2% and China’s Composite dropped 3.4%.

On Thursday, Trump called for 25% tariffs on $60 billion or more of Chinese imports.

  “We are going to be doing a section 301 trade action,” Trump said. “It could be about $60billion dollars but that is really just a fraction of what we are talking about.”
“I have been speaking with the highest Chinese representatives, including the President, and I have asked them to reduced the trade deficit immediately by $100billion. It’s a lot.”

“That would be anywhere from 25 per cent, depending on the way you figure to maybe something more than that.”

“But, we have to do that. The word that I want to use is reciprocal. When they charge 25 percent for a car to go, and we charge two percent for their car to come into the United States, that’s not good. That is how China re-builds itself.”“The tremendous money that we have paid since the founding of the World Trade Organisation, which has actually been a disaster for us. It has been very unfair to us.”

Nikkei crashes from 21,588.10 to 20,934.4

Trump described the US trade deficit with China as “out of control”.

In response, China has retaliated saying it will impose higher duties on US goods such as pork, apples and steel pipes with.

A ministry statement on Friday said the higher US tariffs “seriously undermine” the global trading system.

“China doesn’t hope to be in a trade war, but is not afraid of engaging in one,” the statement said. “China hopes the United States will pull back from the brink, make prudent decisions, and avoid dragging bilateral trade relations to a dangerous place.”

JP Morgan Asset Management Hannah Anderson, global market strategist said, “the equity market will bear the brunt of the market reaction. Most impacted will be the US, Korea, and Taiwan as companies domiciled in these markets make up a significant portion of the global production chain of Chinese exports.”

Soybeans, airplanes, cars and cotton could be targeted by China in response to Trump’s tariffs. Chinese tabloid Global Times said,  “when the time comes it is not only the Chinese government that will counterattack the US trade war, there will be many Chinese people willing to turn it into a people’s war. Don’t believe it? Come try us”.

“It’s already a trade war. And this war is started by the US,” said Cheng Dawei, a professor of international trade at Renmin University in Beijing.