Reported in June 2018, a sell-off of Chinese stocks due to the trade war between the two biggest economies of the world has resulted in lowering Asian equities to a 4-month low. United States President Donald Trump has further threatened new tariffs on Chinese goods. A 10 per cent imposition on $200 Billion worth goods is expected as a comeback to China’s decision of raising tariffs on $50 Billion U.S goods.
China has warned Washington that it will take substantial measures if any more additional list of tariffs on its products were published. Asian Economies like Taiwan, South Korea and Southeast Asia are among the largest exporters of “intermediate goods” to China, which is the assembler of those pieces into finished products and ships
them to destinations such as U.S. Hence, these economies become the most susceptible to the trade-off and likely to get badly affected if the tensions between the two countries heat up any further.
Furthermore, trade frictions are evident by the blows on the financial market, and have created an increasingly nerveracking situation for investors and businesses that fear a fullfledged trade-off could derail global growth.
Morgan Stanley Capital International’s broadest index of Asia-Pacific shares outside Japan lost 1.2 per cent to its lowest, dragged by a fall in Chinese shares.