Hong Kong shares fell in early trading on Monday after US President Donald Trump announced tariffs on Chinese goods. Investors hoping for a favorable start to the lunar Year of the Snake (which began on January 29) were disappointed as they faced the prospect of a renewed trade war between Washington and Beijing, the South China Morning Post reported.
The Hang Seng Index lost 1.8% to 19,853.62 points, its biggest drop in a month, after the market reopened after a three-day break. The Hang Seng Tech Index lost 2.4%. Meanwhile, mainland Chinese stock exchanges remain closed for the Lunar New Year and will not resume trading until February 5.
US President Trump signed an executive order on Saturday imposing tariffs on goods from Canada, China and Mexico. Tariffs of 25% will be imposed on imports from Mexico and Canada (10% on Canadian energy products). An additional 10% tariff will be imposed on goods from China. The measures will take effect on February 4. Canada, China and Mexico account for a third of all goods and services imported by the United States. China’s Ministry of Commerce said on Sunday that Beijing would file a case with the World Trade Organization over the tariffs.