TOKYO (Reuters) - Asian shares retreated on Monday after U.S. President Donald Trump cranked up trade tensions with China by going ahead with tariffs on Chinese imports, prompting Beijing to immediately respond in kind.
Fears of a trade war added to pressure on oil prices, which extended Friday’s big fall amid expectations of higher output from OPEC and Russia.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.2 percent in early trade, near its lowest level since May 31. Financial markets in China and Hong Kong will be closed on Monday for Dragon Boat festival holiday.
Japan's Nikkei .N225 slid 0.7 percent as fears of growing protectionism overshadowed stronger-than-expected export data.
U.S. e-mini S&P futures ESc1 fell 0.4 percent in early trade.
Trump on Friday announced hefty tariffs on $50 billion of Chinese imports, laying out a list of more than 800 strategically important imports from China that would be subject to a 25 percent tariff starting on July 6, including cars.
China said it would respond with tariffs “of the same scale and strength” and that any previous trade deals with Trump were “invalid.” The official Xinhua news agency said China would impose 25 percent tariffs on 659 U.S. products, ranging from soybeans and autos to seafood.
China’s retaliation list was increased more than six-fold from a version released in April, but the value was kept at $50 billion, as some high-value items such as commercial aircraft were deleted.
Analysts say the direct impact of those tariffs may be limited, especially for the U.S. economy, which is in a strong shape with the jobless
