Investing.com – Asian equities tumbled in afternoon trade on Wednesday after the Trump administration threaten to impose tariffs on $200 billion in Chinese goods.
The 10% tariffs will not take effect immediately but will undergo a two-month review process. The proposed list of goods includes consumer items such as clothing, television components and refrigerators as well as other technology products.
In response, China's commerce ministry said in a statement released around midday on Wednesday that it was "shocked" by the latest U.S. trade action and urged international community to work together against the trade bullying, while calling the actions "completely unacceptable".
Senate Finance Committee Chairman Orrin Hatch, a senior member of Trump's Republican Party, said the announcement "appears reckless and is not a targeted approach."
“Tariffs are taxes, plain and simple. Imposing taxes on another $200 billion worth of products will raise the costs of every day goods for American families, farmers, ranchers, workers, and job creators. It will also result in retaliatory tariffs, further hurting American workers," a Chamber spokeswoman said.
The Shanghai Composite and the Shenzhen Component were 1.8% and 2.3% lower on Wednesday following the news. Hong Kong’s Hang Seng Index also fell 1.3%.
Louis Kuijs, Hong Kong-based Head of Asia Economics at Oxford Economics, said while China’s policy response is likely to be limited for now.
"In part because they have only limited ammunition and in part because it's still early in the process on the U.S. side," Kuijs said.
Elsewhere, Japan’s Nikkei 225 was down 1.1% in afternoon trade. The country’s core machinery orders fell 3.7% in May, Cabinet Office data showed on Wednesday, compared with economists' median estimate of a 5.5% drop. It followed a 10.1% rise in April.
SoftBank Group Corp CEO Masayoshi Son said he was confident that his company’s operations would not be affected by U.S. President Donald Trump's escalation of trade disputes and heightened scrutiny of foreign investments.
Down under, Australia’s S&P/ASX 200 lost 0.7% at 6,213.5.