Investing.com – Asian equities plunged in morning trade on Friday while haven assets such as government bonds and the yen gained as investors rushed to safety after Trump launched the long-promised anti-China tariffs.
Overnight, the Dow fell 2.9%, while the S&P 500 slid 2.5% and the Nasdaq dropped 2.4%.
A presidential memorandum signed by Trump said the U.S. would target up to $60 billion in Chinese goods that are “misappropriation of U.S. intellectual property” with tariffs, but only after a 30-day consultation period that begins after a list is finalised.
“I view them (China) as a friend,” Trump said as he started his announcement on Thursday. “We have spoken to China and we are in the middle of negotiations.”
In response, China announced plans on Friday for reciprocal tariffs on $3 billion of imports from the U.S. China planned to add 15% tariffs on U.S. steel pipes, fruit, wine and other products, the country’s Ministry of Commerce said in a statement, adding that the country also planned to add 25% tariffs on pork and recycled aluminum.
Meanwhile, China's embassy in Washington said Beijing would “fight to the end” in any trade war with the United States.
“We will retaliate. If people want to play tough, we will play tough with them and see who will last longer,” Chinese ambassador Cui Tiankai said in a video posted to the embassy's Facebook account.
Major industrials in the U.S. that could become targets of Chinese trade retaliation plunged further, with aircraft maker Boeing (NYSE:BA) down 5.2% and earthmoving equipment maker Caterpillar Inc (NYSE:CAT) falling 5.7%.
The Shanghai Composite and Shenzhen Component both fell 2.4% by 10:42PM ET (02:42GMT) as China urged the U.S. to resolve any trade disputes via dialogue, stressing that the country is not afraid of a trade war, and that it is ready to take legal action against the U.S. under the WTO framework.
In Hong Kong, the Hang Seng Index plunged 3.2%. Stocks that are most exposed to the US took the biggest hit.
WH Group Ltd (HK:0288), which bought U.S. based pig giant Smithfield Foods in 2013 slid 10%. Apple supplier AAC Technologies Holdings Inc (HK:2018) fell more than 5%. Index heavyweight Tencent Holdings Ltd (HK:0700) fell as much as 8% after Naspers sold a 2% stake in the company. Wynn Macau Ltd (HK:1128) slid 3.5% after former Wynn Resorts CEO Steven Wynn sold his remaining shares in the company.
Meanwhile, Japan’s Nikkei dived 3.8%. The country’s CPI came in at 1% in February, matching the median estimate but still far away from its target of 2%.
Bank of Japan Deputy Governor Masazumi Wakatabe said on Friday that the data showed inflationary pressure is insufficient and that he wanted to maintain the current policy regime to meet the central bank's 2% target.
Elsewhere, the KOSPI was down 2.3%. Samsung Electronics (KS:005930) chairman Kwon Oh-hyun said he expected uncertainty from trade protectionism and geopolitical risk to persist throughout the year.
Down under, Australia’s S&P/ASX 200 traded 2.1% lower.