U.S. stock futures turned negative in Asian trading on Tuesday after President Donald Trump’s 10% trade tariffs against China took effect. Beijing retaliated with a series of countermeasures, fueling concerns over a renewed U.S.-China trade war and weighing on investor sentiment.
U.S. Tariffs Take Effect, Beijing Responds
At 00:00 ET (05:00 GMT) on Tuesday, the 10% tariffs on Chinese imports officially came into force, with no relief announcement from the White House. Beijing swiftly retaliated by:

Imposing import tariffs on select U.S. goods
Setting export controls on tungsten-related materials, critical for aerospace and defense industries
Launching an antitrust probe into Google (NASDAQ:GOOGL)
Adding PVH Corp (NYSE:PVH) and Illumina (NASDAQ:ILMN) to its “unreliable entities” list

These moves signal heightened tensions between the world’s two largest economies, with fears of further escalations given Trump’s hardline stance on China.
U.S. Stock Futures Drop Amid Trade War Concerns
As markets reacted to the latest trade developments, U.S. stock futures declined in early Asian trading:

S&P 500 Futures fell 0.3% to 6,001.50 points
Nasdaq 100 Futures dropped 0.5% to 21,291.25 points
Dow Jones Futures slipped 0.3% to 44,436.0 points

Market Sentiment Shaken
The trade war concerns overshadowed Wall Street’s initial optimism after Trump postponed a proposed 25% import duty on Canada and Mexico by 30 days. However, his unwavering stance on China continues to unsettle markets. Investors now await a crucial conversation between Trump and Chinese President Xi Jinping later this week.
Despite the U.S. market downturn, Hong Kong’s Hang Seng Index was trading up 1.8%, driven by gains in technology stocks. Mainland Chinese markets remained closed for the Lunar New Year holiday.
Trade War Impact on Financial Markets
Investors are increasingly cautious as higher tariffs could lead to inflationary pressures, affecting company earnings growth and overall market stability.
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What’s Next?
With Trump’s trade war rhetoric escalating and China’s retaliation intensifying, investors are bracing for further stock market fluctuations. If tensions worsen, we could see increased market volatility, with a potential impact on corporate earnings and economic growth projections.
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