U.S. stock futures on Tuesday were lower in Asian trade as President Donald Trump's newly imposed 10 percent tariffs on China came into effect at 05:00 GMT, reigniting market jitters. Beijing responded promptly with a series of retaliatory measures after no word came from the White House about relief. Chinese authorities are said to have imposed selective import tariffs on U.S. goods and placed export controls on tungsten-related materials, according to Bloomberg.
Investors have reacted with caution. S&P 500 Futures dropped 0.25% to 6,008 points, Nasdaq 100 Futures fell 0.13% to 21,376 points, and Dow Jones Futures lost 0.26% to 44,431 points by 4:55 am ET. While Trump has delayed a proposed 25 percent duty on Canada and Mexico, no such relief has been given to China. Hong Kong's Hang Seng index edged higher, up 1.8% on gains in technology stocks. Mainland Chinese markets are still closed for the Lunar New Year.
While these trade measures may be driving worse inflationary pressures and hurting the economy's growth, the Federal Reserve is already stopping far earlier to consider future interest rate cuts, analysts warn, as the arm wrestles on rising international trade tensions heats up.
