Chinese stocks traded in the United States fell on Friday after former President Donald Trump warned that China had become “very hostile” and threatened to significantly increase tariffs on Chinese imports if he returns to office.
Alibaba and Baidu fell about 8% each, while Jingtocom and PDD Holdings fell 6.6% and 5.2%, respectively. The iShares MSCI China ETF (MCHI), which tracks large U.S.-listed Chinese companies, fell 5.2%.
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iShares MSCI China ETF Friday
The decline underscored investors’ new concerns about tensions between the U.S. and China, which regularly escalate amid disputes over trade, technology and national security.
President Trump has accused China of keeping the world “captive” through its dominance of rare earth metals. Earlier this week, the Chinese government tightened its grip on the sector, requiring foreign companies to obtain government permission to export products containing rare earth elements, which account for more than 0.1% of the total value.
“Friday was a reminder of how emotion and uncertainty can move markets,” said Mark Hackett, chief market strategist at Nationwide. “While it’s too early to say with confidence whether this statement will trigger the next phase of U.S.-China trade tensions or whether there will be further negotiations in public, investors have opted for a wait-and-see tactic.”
Chinese stocks have rebounded strongly this year, buoyed by signs of economic stabilization and investor optimism after years of weakness. The iShares MSCI China ETF is still up 32% after Friday’s pullback.
— CNBC’s Sarah Ming contributed reporting.
