Asian stock markets fall as Trump hardens stance against China

US President Donald Trump defended his decision to raise tariffs on China putting, keeping investors on edge and contributing to losses for Asian stocks on Tuesday.

Tensions were apparent despite speculation that Trump and Chinese leader Xi Jinping might meet at the G20 summit in Japan next June.

On Monday, Trump said he would American tariffs to another $300bn-worth of imports of China, in effect covering nearly all of the Asian giant's exports.

Just a few hours before, China said it would impose higher tariffs on $60bn of American goods in response to an earlier set of US levies .

And on Monday, Wall Street lived one of its worst sessions of 2019 with investors spooked by the escalating tensions between the two powers.

The S&P 500 fell 2.4% on Monday, marking its worst day since early January while the Nasdaq Composite gave back 3.4%, for its biggest daily loss since December 2018.

China’s CSI 300 index was down by as much as 1% on Tuesday but managed to pare earlier losses. The Hang Seng China Enterprises Index listed in Hong Kong meanwhile dropped as much as 2.4% at one point during the session, before also pulling back to finish the day 1.6% lower.

In Tokyo, the Topix index fell 0.9% and Sydney’s S&P/ASX 200 dropped around 1%.

On his meeting with Chinese President Xi, Trump also said on Monday: “We’re in a great position right now, no matter what we do. I think China wants to have it.”

“Maybe something will happen,” Trump added. “We’re going to be meeting, as you know, at the G20 in Japan and that’ll be, I think, probably a very fruitful meeting.”

Trump reassured that US consumers would not be the ones hit by the tariffs: “There is no reason for the US consumer to pay the tariffs, which take effect on China today.”

But at the weekend, his national economic adviser, Larry Kudlow, said US businesses and consumers would be among the ones to foot the bill for the trade war, saying that “both sides will suffer”.

Trump has promised to “make it up” to farmers hurt by Chinese tariffs against US soybeans and other agricultural products with a bailout programme that was previously set at $12bn but may now “go higher”.

“We’re going to take the highest year, the biggest purchase that China has ever made with from our farmers, which is about $15bn, and do something reciprocal to our farmers so our farmers can do well.”