Global markets continued their sharp decline as China promised to retaliate against the US if it goes through with tariff increases on Chinese goods scheduled to go in effect in September.
China’s Finance Ministry said Thursday that it will take “necessary action” against the US if tariffs go into effect on September 1.
The short statement from the Finance Ministry made the Japanese Nikkei fall by 1.2 percent and Australia’s S&P/ASX 200 by nearly three percent. Hong Kong and Shanghai’s markets dropped but regain traction by the end of the trading day.
The Thursday sell off comes after US markets crashed to the worst day for markets so far in 2019.
The United States Trade Representative (USTR) office delayed tariffs on certain items on a list of Chinese goods to be hit with tariffs on Tuesday. The USTR said tariffs would be delayed until December.
The USTR said the change stems from “health and security factors.”
Analysts however believe US President Trump’s change in policy stems from the possible negative public reaction he may have faced if consumers found higher prices at retail stores during the holiday shopping season in December — the most important retail month of the year for US retailers.