The Chinese stock market is experiencing a catastrophic fall as it heads for the worst single-day crash since the Great Financial Crisis of 2008. On Monday, the Hang Seng Index dropped a staggering 12%, while the CSI300 blue-chip index fell by 7.05%. This chaos was triggered by escalating trade tensions between Beijing and Washington, sparking fears of a full-scale global trade war.
Communist China recently announced a hefty 34% retaliatory tariff on all goods imported from the United States, set to be enforced on April 10. This comes as a misguided response to President Donald Trump’s bold move earlier this week, where his administration implemented reciprocal duties to address longstanding trade imbalances and defend American industries from unfair practices.
A translated statement from the CCP’s Ministry of Finance ominously declared:
On April 2, 2025, the US government announced the imposition of “reciprocal tariffs” on Chinese goods exported to the US. The US practice is inconsistent with international trade rules, seriously undermines China’s legitimate rights and interests, and is a typical unilateral bullying practice that not only undermines the interests of the United States itself, but also endangers global economic development and the stability of the production and supply chain.
China urged the U.S. to revoke its unilateral tariff measures and resolve trade differences through equal and mutually beneficial consultations. However, President Trump didn’t hesitate to respond. “CHINA PLAYED IT WRONG, THEY PANICKED — THE ONE THING THEY CANNOT AFFORD TO DO!” he remarked on Truth Social.
Monday’s crash saw the Hang Seng Index nosedive by 12.53%, its steepest drop since the financial crisis. Meanwhile, the Hang Seng Tech Index plummeted by 16.29%, wiping out billions in market value. Mainland China’s CSI 300 index also saw a significant decline of 7.05%, closing at 3,589.44, marking its worst single-day drop since last October, as reported by CNBC.
Major tech companies like Alibaba and Tencent saw their stocks tumble over 10%, while HSBC and Standard Chartered faced record losses of 13% and 16%, respectively. Sectors including solar, banking, and electric vehicles were devastated, with some mainland indexes losing nearly 10%, according to Reuters.
A report from CNBC highlighted the significant impact on Asian markets:
Still, they noted that Asian markets are the worse hit. They estimate that China and Vietnam will experience losses exceeding 0.5% of GDP, while the European Union and Japan face a hit of around 0.3% to 0.4% of GDP.
Meanwhile, U.S. futures took a hit, as investors’ hopes of the Trump administration successfully negotiating lower rates were dashed. In addition, U.S. oil prices fell below $60 a barrel on Sunday, with futures tied to U.S. West Texas intermediate crude dropping over 3% to $59.74, their lowest since April 2021.
Despite market concerns, Trump’s economic team confidently dismissed fears of inflation and recession, affirming that tariffs would remain steadfast regardless of market reactions.
