TOKYO (Reuters) - Asian stocks extended a global downturn on Tuesday, while the safe-haven yen rose as U.S. President Donald Trump threatened new tariffs on Chinese goods in an escalating tit-for-tat trade war between the world’s two biggest economies that has rattled financial markets.
Trump warned on Monday that Washington would impose a 10 percent tariff on $200 billion of Chinese goods after Beijing’s decision to raise tariffs on $50 billion in U.S. goods. Trump said if China increases its tariffs again in response to the latest U.S. move, “we will meet that action by pursuing additional tariffs on another $200 billion of goods.”
The retaliatory moves come after Trump said last week he was pushing ahead with tariffs on $50 billion of Chinese imports.
The trade frictions have kept financial markets on edge, with investors increasingly worried that a full-blown trade conflict could derail global growth.
S&P 500 futures ESc1 were off 0.6 percent, pointing to a another down day for Wall Street shares which slipped on Monday.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dipped 0.1 percent.
Japan's Nikkei .N225 lost 0.45 percent, South Korea's KOSPI .KS11 edged down 0.1 percent while Australian stocks added 0.3 percent.
The dollar fell 0.45 percent to 110.06 yen JPY= following Trump's tariff comments. The yen is often sought in times of market turmoil and political tensions.
“The financial markets are trying to gain a breather after last week, when there were many news events, but U.S.-China trade remains a lingering theme, at least until the U.S. tariffs
