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Stocks in China and Hong Kong pulled back but overall, Asia-Pacific stocks had a relatively muted reaction after Donald Trump slapped further tariffs on Chinese goods.

Mr Trump on Monday imposed a 10 per cent tariff on about $200bn worth of Chinese imports starting next week. The US president threatened to up tariffs to 25 per cent next year if no deal is reached between Beijing and Washington. China has said it will respond with its own round of levies. 

The US had already introduced tariffs on about $50bn of Chinese imports this year, but the latest tariffs mean duties cover about half of all goods from China. 

Iris Pang, greater China economist for ING, noted that the exclusion of some consumer goods from the tariff list would limit the impact on US inflation and Chinese exporters but added that Beijing is unlikely to return to the negotiating table under the threat of higher tariffs. 

“We believe China would only return to negotiations if the US keeps its previous promise that there would not be further tariffs. Then both sides can talk again. Hopefully, this is what is going to happen though the chance is low,” Ms Pang said. 

Hong Kong stocks pulled back following the latest on the US-China trade war, with the Hang Seng index dipping 0.7 per cent. The Hang Seng China Enterprises index of Hong Kong-listed major Chinese companies was down 0.4 per cent.

Chinese stocks posted minor losses in the wake of the announcement from Washington with the CSI 300 of Shanghai and Shenzhen stocks down 0.1 per cent. 

The reaction to the US tariffs was more marked for China’s currency. The onshore renminbi, which is permitted to trade 2 per cent either side of a daily mid-point set by the People’s Bank of China, was 0.4 per cent weaker at Rmb6.8778 per dollar and the offshore renminbi was 0.2 per cent weaker at Rmb6.8787.

Japanese stocks, however, shrugged off the latest salvo in the trade spat, climbing 0.8 per cent as consumer discretionary stocks climbed 1.4 per cent and technology stocks rose 0.6 per cent. 

The S&P/ASX 200 dipped 0.3 per cent as the basic materials sector fell 0.7 per cent and energy stocks stocks slipped 1 per cent.

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