Hong Kong, Aug 5 (AFP/APP):Asian markets plummeted Monday as the Chinese yuan fell sharply, days after US President Donald Trump’s vow to impose fresh tariffs on goods from China sent trade war fears soaring.
Trump’s announcement, which came on Thursday, means virtually all of the $660 billion in annual merchandise trade between the world’s two biggest economies will be subject to punitive tariffs, with the latest duties due to take effect September 1.
The news saw all three major Wall Street indices slump to their lowest levels since June, with the S&P 500 and Nasdaq recording their worst weekly losses of 2019 on Friday.
In China, the yuan dropped to its lowest level to the dollar since August 2010, fuelling speculation that Beijing was devaluing its currency to support exporters and offset Trump’s latest threat to hit $300 billion in Chinese goods with 10 percent tariffs.
The US leader regularly accuses the Chinese central bank of artificially weakening the yuan — charges long denied by Beijing.
The onshore yuan tumbled to 7.0307 against the dollar — its lowest level since 2008 — while the more freely traded offshore yuan tumbled to 7.1085, breaching the 7.0 level which investors see as a key threshold in the currency’s value.
Multiple rounds of tit-for-tat tariffs between the world’s top two economies have already battered trade, with China’s American imports shrinking 30 percent in the first half of the year.
Beijing has vowed to hit back if Washington goes ahead with its latest threat, while news that demand for US exports had weakened underscored concern that trade was becoming a trouble spot for economies worldwide.