Monday, Asian shares stumbled on Monday as investors and analysts’ concerns over the looming trade war between China and the United States heightened. This is after Shanghai launches its first-ever yuan crude futures after U.S. President: Donald Trump signed a memorandum that could impose tariffs over Chinese goods imports. Shanghai’s crude futures debut is perceived by analysts and investors as a crude futures that seeks power over pricing and challenges benchmarks in the United States and Europe.
Data indicated that Japan’s Nikkei. N225 skid by approximately 0.9%, hovering near six-month lows in early trade. Australian shares shed 0.5% and is considered as their lowest since October 2017. MSCI’s index of Asia-Pacific shares outside Japan indicated a 0.1% decline, and is headed for its first quarterly loss since late 2016.
In accordance to this, Alex Wolf, Hong Kong-based senior emerging markets economist at Aberdeen Standard Investments mentioned that the United States’ tariffs on China will absolutely cause collateral damage in Asia, specifically to smaller open economies.
He also added that a greater share of value-added in United States computer imports comes from Asia ex-China than from China itself, as well as the assimilation of cross-border supply producers means that small open economies like Taiwan and Korea would be particularly delicate to US/China trade barriers.