Asian stocks plunge on US-China trade war worries

BEIJING — Asian stock markets plunged Friday after President Donald Trump's surprise threat of tariff hikes on additional Chinese imports.

Tokyo's main market index fell 2.5% and Hong Kong's benchmark lost 2.3%. Markets in Shanghai, Sydney and Seoul also declined.

Trump's announcement of 10% tariffs on $300 billion of Chinese goods, due to take effect Sept. 1, surprised investors after the White House said Beijing promised to buy more farm goods. That came as their latest round of trade talks ended in Shanghai.

That added to investor unease following Federal Reserve Chairman Jerome Powell's suggestion Wednesday that the U.S. central bank had no plans for an extended cycle of interest rate cuts.

“Markets are reeling after President Trump expressed his frustration with China's stalling techniques,” said Stephen Innes of VM Markets in a report. “With the global markets on edge after Chair Powell's communication failed so miserably, few traders have been willing to step in front of this steamroller.”

The Shanghai Composite Index lost 1.8% to 2,858.04 while Tokyo's Nikkei 225 declined to 21,014.62.

Hong Kong's Hang Seng fell to 26,935.26 while Seoul's Kospi shed 0.2% to 2,001.09. Sydney's S&P-ASX 200 retreated 0.3% to 6,768.70 and India's Sensex was down 0.8% at 36,718.75. Markets in New Zealand, Taiwan and Southeast Asia also declined.

On Wall Street, the benchmark Standard & Poor's 500 fell for a fourth day, losing 0.9% to 2,953.56.

The Dow Jones Industrial Average declined 1% to 26,583.42. The Nasdaq composite ended 0.8% lower at 8,111.12.

The escalation in U.S.-Chinese trade tension comes after both sides resumed negotiations.