Chinese Companies Look Beyond U.S. Tariffs, Stock Indexes Half Four-Month Rally

Li Chen
11 Feb, 2025
Hong Kong

Stock market indexes in China and Hong Kong dropped, and investors reviewed the latest round of new tariffs announced by the U.S. 

The Hang Seng index and CSI index dropped about 0.6% in choppy trading after the U.S. announced 25% tariffs on steel and aluminum imports with "no exemptions or exceptions."

The U.S. imports most of its steel products from Canada, Brazil, China, and South Korea.

The steel tariffs are slated to be imposed from March 4, and they will be in addition to 10% tariffs on all Chinese imports. 

The Trump administration is looking to raise additional federal government revenue, and the tax on imports is the new source that the administration has identified.

The tariffs on imports, which are indirect taxes and paid by all Americans, provide a new source of government revenue as the Trump administration prepares to pass a tax cut for wealthy donors who bankrolled his presidential election. 

Chinese manufacturers have accelerated their plans to diversify their manufacturing base away from China and stepped up their efforts to increase shipments to other countries and regions in the world. 

Over the last six years, Chinese companies have increased their manufacturing presence in Mexico, Vietnam, the ASEAN region, Hungary, and Brazil. 

The offshore Chinese yuan hovered near 7.30 against the U.S. dollar as the U.S. launched a new round of tariffs targeting products shipped by China, Canada, Mexico, and Brazil. 

 

China Stock Movers 

The Hang Seng index declined 0.6% to 21,404.70, and the CSI 300 index dropped 0.5% to 3,883.22.

Electric vehicle makers traded down on the worries that the next set of tariffs on Chinese imports will include advanced electronic products. 

Li Auto declined 5% to HK $100.20, BYD dropped 0.2% to HK $329.60, Xpeng plunged 9% to HK $62.05, and Geely Automobile Holding declined 10.5% to HK $15.82.

Separately, BYD said it plans to install autopilot systems on almost all of its models as early as this year.

Zijin Mining Group advanced 1.7% to HK $16.42 after the international spot price of gold advanced and traded at a new record high of $2,910.85.