China’s stocks fall after US ups import tariffs on a range of Chinese goods

Posted by Admin May 15, 2024 Bussiness

China’s stocks fell for a third day, amid resurgent trade tensions after the US administration increased tariffs on imports of a range of Chinese products, drawing a retaliation from Beijing’s Ministry of Foreign Affairs which said China would take “full necessary measures to safeguard its legitimate rights and interests”.

The Shanghai Composite Index and the CSI300 index both retreated by 0.3 per cent each, and were last seen at 3,137.05 and 3,644.47 respectively at 10am local time.

They underperformed other major Asian markets all rose amid expectations the US central bank will cut interest rates as early as September. Japan’s Nikkei 225 climbed 0.6 per cent, while Australia’s S&P/ASX 200 added 0.5 per cent and Taiwan’s Taiex index rose 0.9 per cent. Hong Kong’s stock markets are shut for a public holiday and reopen for trading on Thursday.

In the latest sign of the tensions between the world’s two largest economies, Beijing slammed the US move to increase levies on clean-energy products to between 25 per cent and 100 per cent and vowed to take necessary action to protect the interests of the Chinese companies. US President Joe Biden blamed China for subsidising these industries and causing a glut of capacity.

A worker assembles an SUV at a car plant of Li Auto, a major Chinese EV maker, in Changzhou in eastern China’s Jiangsu province on March 27, 2024. The Biden administration has announced plans to slap new tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminium and medical equipment. Photo: AP

“We are more concerned China may face similar trade-restrictive measures from other regions,” said Lu Ting, chief China economist at Nomura Holdings in Hong Kong. “China has recently been criticised by some of its major trade partners for running at ‘overcapacity’, dumping cheap products and deepening its trade relations with Russia. Rising trade tensions may impede the export sector and encourage more supply chain relocation away from China in the longer run.”

Consumer, healthcare and financial sectors lagged among the CSI 300 constituents. Biopharmaceutical firm Wuxi AppTec slumped 3.4 per cent to 45.54 yuan, China Merchants Bank lost 1.3 per cent to 34.87 yuan and EV maker BYD eased 1.2 per cent to 222.28 yuan.

Elsewhere, Guolian Securities surged by the 10 per cent daily limit to 11.51 yuan in Shanghai after unveiling a plan to buy out privately-held Minsheng Securities, as the stock resumed trading after being suspended over the past two weeks.