Escalating US-China trade war sparks stock sell-offs

The United States and China have escalated their trade disputes by hiking tariff rates against each other again.

US President Donald Trump announced on August 23 that as of October 1, Chinese products worth $250 billion will be taxed at 30 per cent from 25 per cent. His move came after China unveiled plans to impose a 10 per cent duty on $75 billion worth of US goods. 

Trump also ordered US firms to leave China. “Our great American companies are hereby ordered to immediately start looking for an alternative to China," he tweeted on August 23.

This new escalation in the trade war has hit stock markets hard.

The NASDAQ plunged 3 per cent at Friday’s closing, the S&P sharply dropped 2.6 per cent, while the Dow Jones Industrial Average also sharply closed down 2.4 per cent at 25,629.