FX.co ★ China Stocks Drop on Trump Tariff Threats

The Shanghai Composite Index fell by 1% to approximately 3,860, while the Shenzhen Component Index decreased by 2.3% to 13,050 on Monday. This decline continued from the previous trading session, following a threat by US President Donald Trump to impose an additional 100% tariff on Chinese goods. This threat was in response to China's newly implemented export controls on rare earth minerals. In retaliation, China promised to respond if these tariffs were enacted. Despite the tensions, Trump later indicated a willingness to negotiate before a potential meeting with President Xi Jinping later in the month, assuring that trade relations with China "will all be fine." The market downturn was primarily driven by high-growth technology and new energy stocks, with companies such as Luxshare Precision, Eoptolink Technology, Zhongji Innolight, Contemporary Amperex, and Sungrow Power experiencing declines ranging from 2.4% to 5.4%. Investors are now keenly awaiting China’s trade data for September to gain further insights into the impact of the escalating trade tensions.