Escalating Tit-for-Tat Tariffs Weigh On Stocks in China and Hong Kong

Li Chen
04 Mar, 2025
Hong Kong

Tariff jitters kept market sentiment on the defensive in China and Hong Kong, as China retaliated with its set of tariffs on American products. 

The Hang Seng index decreased 0.3%, and the mainland-focused CSI 300 index declined 0.1% after the U.S. added a new set of tariffs on Chinese shipments totaling 20%, effective March 4. 

China announced its set of tariffs on American goods and farm products totaling between 10% and 15%, and the Ministry of Commerce said it will put trade restrictions on American companies operating in China. 

The ministry said it will expand its list of companies by 15 that will require special licenses before receiving "dual use" items, products that are used both in military and civilian applications.

China imposed 10% tariffs on soybeans, pork, fruits, vegetables, and dairy products, and placed a 15% import tax on corn, cotton, and wheat.

The ministry also announced special restrictions on genetic sequencing company Illumina, effectively banning the company from doing business with China. 

China also plans to file a lawsuit with the World Trade Organization seeking reversal of the U.S. tariffs.

 

China Indexes and Stocks 

The Hang Seng index declined 0.3% to 22,951.18, and the broader CSI 300 index fell 0.1% to 3,885.22.

Technology companies and real estate developers led the decliners in China and Hong Kong trading, ahead of the start of the National People's Congress on Wednesday. 

Two new companies started trading in Shanghai and Shenzhen following the listing of Mixue Group, the most popular initial public offering ever in Hong Kong. 

Two industrial companies completed their initial public offering and began trading in China today. 

Hefei Conver Holding, the automobile parts maker, soared over 130% to 57.05 yuan on the first day of trading in Shanghai. 

Jiangsu Changyou Environmental Protection Technology, a maker of advanced materials, jumped 240% to 98.61 yuan in Shenzhen.

Mixue Group decreased 0.1% to HK 289.60 after the beverage chain operator's public offering received record interest from retail investors.