China Indexes Face Reality of High U.S. Tariffs

Li Chen
07 Jul, 2025
Hong Kong

China stocks faced selling pressures amid trade uncertainty and lack of catalysts. 

The Hang Seng index decreased 0.5%, and the mainland-focused CSI 300 index fell 0.6% ahead of the looming self-imposed deadline by the U.S. for its global trade partners. 

Despite bold claims by the Trump administration, the U.S. is struggling to strike trade deals with China, the European Union, Canada, South Korea, and Mexico before the July 9 deadline.

Trade negotiations with China have stalled for three weeks as the U.S. looks for at least a 40% duty on direct imports from China and demands duty-free access for agriculture exports. 

The U.S. and China have agreed to an early August deadline, and both countries have taken tentative steps to cool down tensions.

China has lifted its restrictions on rare earth shipments, and the U.S. has eased its ban on the sale of design software for advanced chips.

Moreover, the latest trade framework between the U.S. and Vietnam called for 20% tariffs on goods shipments and a 40% rate on transshipment. 

The Trump administration has targeted shipments from China in its negotiations with Mexico, Cambodia, Thailand, and Malaysia, hoping to further fragment international supply chains away from the second-largest economy.

 

China Indexes and Stocks 

The Hang Seng index decreased 0.5% to 23,808.91, and the CSI 300 index fell 0.6% to 3,958.86. 

Alibaba Group Holding decreased 0.3% to HK $104.80, Tencent Holdings rose 0.3% to HK $500.50, and Meituan eased 0.4% to HK $117.90. 

Export-sensitive companies declined following the trade uncertainties and worries about the excess capacity in the solar industry. 

Xinyi Solar Holdings Ltd. edged down 4.2% to HK $2.76, JA Solar Technology dropped 1% to ¥10.33, and Trina Solar fell 1% to ¥14.64. LONGi Green Energy Technology decreased 0.7% to ¥15.46. 

FWD Group Holdings increased 1% to HK $38.40, and the insurance company completed its listing on the Hong Kong Stock Exchange. 

The company sold 9.13 million shares at a price of HK $38.0 per share in an initial public offering and raised HK $3.4 billion.