Even if global investors aren’t convinced a trade war has truly arrived, they might just be thinking it’s now more of a possibility, something that was reflected by the heavy hits some assets took Tuesday.
The selling kicked off in Asia after news that President Donald Trump asked his administration to find $200 billion more in tariffs after Beijing said it would retaliate against $50 billion in planned tariffs on its goods. Trump didn’t stop there, threatening another $200 billion on top of the $250 billion if China tried to hit back again.
U.S. stocks were shaping up for an ugly session with the Dow DJIA, -1.37% threatening to wipe out all of its gains this year.
Right off the bat China stocks returned from a break Monday to a wave of selling, with the Shanghai Composite SHCOMP, -3.78% logging its worst session in two years, with a drop of 3.8%. But the technology-heavy Shenzhen ChiNext Price Index 399006, -5.76% slid 5.8%, making Tuesday its worst day since 2015.
Read: Escalating U.S.-China trade spat comes at a bad time for global growth, economist says
Both indexes are off more than 18% from January highs, putting them closer to bear-market status.
In Asia, Apple Inc. AAPL, -1.96% suppliers such as the iPhone camera maker Cowell E Holdings 1415, -11.52% took a deep hit after the New York Times reported that Apple CEO Tim Cook visited the White House last month to express concerns about a potential trade war’s effect on the company. Reported assurances by Trump that iPhones assembled in China won’t be subject to tariffs did not keep related companies from selling off.
Meanwhile, the Japanese yen, which tends to gain when investors get spooked by geopolitical pressures, jumped 0.7% against the dollar USDJPY, -0.56% USDJPY, -0.56% and also rallied against other rivals such as the euro EURJPY, -0.99% and the pound GBPJPY, -1.08% .
And China demand-driven industrial metals, such as copper HGU8, -1.79% , were tumbling on signs of those fresh trade tensions.
Finally, diving straight into the heart of trade worries, shares of Chinese pork producer WH Group 0288, -5.68% , which owns U.S.’s Smithfield Foods and is vulnerable to potential pork and soybean tariffs, took a 5.7% knock.