Chinese stock markets are on course for their worst single-day collapse since the 2008 Great Financial Crisis on Monday.
The Hang Seng Index plummeted over 12%, and the CSI300 blue-chip index dropped 7.05%. Retaliatory tariffs between Beijing and Washington ignited fears of a full-blown global trade war.
Last week, Communist China announced a sweeping 34% retaliatory tariff on all goods imported from the United States, which will take effect on April 10.
This comes as a pathetic retaliation to President Donald Trump’s decisive action earlier this week, when his administration rightfully imposed reciprocal duties on the Asian superpower, a move aimed at rectifying longstanding trade imbalances and protecting American industries from unfair competition.
According to a Google-translated statement by CCP’s Ministry of Finance:
On April 2, 2025, the US government announced the imposition of “reciprocal tariffs” on Chinese goods exported to the US. The US practice is inconsistent with international trade rules, seriously undermines China’s legitimate rights and interests, and is a typical unilateral bullying practice that not only undermines the interests of the United States itself, but also endangers global economic development and the stability of the production and supply chain.
In accordance with the Tariff Law of the People’s Republic of China, the Customs Law of the People’s Republic of China, the Foreign Trade Law of the People’s Republic of China and other laws and regulations and the basic principles of international law, and with the approval of the State Council, the State Council Tariff Commission announced that from 12:01 on April 10, 2025, a 34% tariff will be imposed on all imported goods originating from the United States.
Goods that have been shipped from the place of departure before 12:01 on April 10, 2025 and imported between 12:01 on April 10, 2025 and 24:00 on May 13, 2025 will not be subject to the additional tariffs.
China urges the United States to immediately cancel its unilateral tariff measures and resolve trade differences through consultation in an equal, respectful and mutually beneficial manner.
President wasted no time in hitting back. “CHINA PLAYED IT WRONG, THEY PANICKED — THE ONE THING THEY CANNOT AFFORD TO DO!” Trump blasted on Truth Social.
On Monday, the Hang Seng’s 12.53% drop marked its steepest fall since the Great Financial Crisis, while the Hang Seng Tech Index cratered 16.29%, erasing billions in market value. Mainland China’s CSI 300 index plunged 7.05% to close at 3,589.44 — marking its steepest single-day decline since last October, according to CNBC.
Tech giants Alibaba and Tencent nosedived over 10%, while HSBC and Standard Chartered saw record losses of 13% and 16%, respectively.
Solar, banking, and electric vehicle stocks were among the hardest hit, with some mainland sector indexes losing nearly 10%, according to Reuters.
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Still, they noted that Asian markets are the worse hit. They estimate that China and Vietnam will experience losses exceeding 0.5% of GDP, while the European Union and Japan face a hit of around 0.3% to 0.4% of GDP.
U.S. futures dropped as investors’ hopes of the Trump administration having successful negotiations with countries to lower the rates were dashed.
Meanwhile, U.S. oil prices dropped below $60 a barrel on Sunday stateside. Futures tied to U.S. West Texas intermediate crude fell more than 3% to $59.74, their lowest since April 2021.
Trump’s top economic officials dismissed any fears of inflation and recession, declaring that tariffs would persist whatever markets may do.
