Stock markets in Asia experienced a sharp decline on Thursday, extending a recent rout that has been fueled by escalating trade tensions between the United States and China. The sell-off was triggered by President Donald Trump’s decision to impose tariffs on an additional $200 billion worth of Chinese goods, a move that has raised fears of a full-blown trade war between the world’s two largest economies.
The benchmark Shanghai Composite Index tumbled 2.9 percent, while Hong Kong’s Hang Seng Index dropped 1.9 percent. Japan’s Nikkei 225 Index fell 1.4 percent, South Korea’s KOSPI Index lost 1.6 percent, and Australia’s ASX 200 Index declined 1.2 percent.
Investors in Asia are growing increasingly concerned about the impact of the trade dispute on global economic growth. The International Monetary Fund has warned that the tariffs could shave 0.5 percent off global GDP by 2020, while the World Trade Organization has cautioned that they could disrupt the entire global trading system.
The sell-off in Asian markets comes on the heels of a similar decline in Wall Street, where the Dow Jones Industrial Average fell more than 350 points on Wednesday. The S&P 500 Index and the Nasdaq Composite Index also closed in negative territory, as investors fretted about the impact of the trade tensions on corporate profits.
In response to the escalating trade tensions, Chinese officials have vowed to retaliate with their own set of tariffs on U.S. goods. This tit-for-tat escalation has raised concerns about the potential for a full-blown trade war that could disrupt supply chains, increase costs for businesses and consumers, and dampen global economic growth.
The sell-off in Asian markets is a clear signal that investors are growing increasingly nervous about the impact of the trade dispute on the global economy. With both the U.S. and China showing no signs of backing down, market volatility is likely to persist in the coming weeks as investors navigate the uncertain terrain of escalating trade tensions.