Chinese stocks closed lower on Wednesday after U.S. President Donald Trump stated that his administration was considering imposing tariffs on imports from Beijing by early February. At the end of the session, the CSI 300 index dropped 0.93% to 3,797 points, the Shanghai Composite Index fell 0.89% to 3,213 points, and the Shenzhen Composite Index declined by 1% to 1,920 points.
The Hong Kong Hang Seng Index dropped 1.63% to 19,778 points at the close, indicating weak foreign investor interest in Chinese stocks.
Trump’s Tariff Announcement
Newly inaugurated President Donald Trump mentioned that his administration is considering a 10% tariff on imports from China starting February 1. He explained the potential move during a press conference at the White House yesterday, attributing it to China's involvement in smuggling drugs into Mexico and Canada.
This statement followed a phone call between Trump and Chinese President Xi Jinping last Friday—prior to Trump’s inauguration—during which they discussed issues related to drugs and trade.
During his inauguration speech on Monday, Trump also indicated that, regardless of other issues, his administration might impose tariffs on China unless they agreed to a deal to sell the popular short-video app TikTok and divest its parent company ByteDance.
Currency Exchange
On the foreign exchange front, the U.S. dollar rose 0.17% against the Chinese yuan in international markets, reaching 7.2737 yuan.
