Investing.com - Asian markets slumped in morning trade on Tuesday after the U.S. designates China as a currency manipulator, further worsening a trade war between the two nations.
China’s Shanghai Composite and the Shenzhen Composite dropped 2.7% and 2.4% respectively by 10:37 PM ET (02:37 GMT). Hong Kong’s Hang Seng Index lost 2.1%.
In a statement, Treasury Secretary Steven Mnuchin said overnight that the U.S. government has declared China a currency manipulator.
On Monday, China allowed the yuan to fall past the key 7-per-dollar level for the first time in more than 10 years. The People’s Bank of China (PBOC) said it would "continue to ... take necessary and targeted measures against the positive feedback behavior that may occur in the foreign exchange market."
"This is an open acknowledgement by the PBOC that it has extensive experience manipulating its currency and remains prepared to do so on an ongoing basis," the Treasury statement said.
The PBOC has set the yuan fixing at 6.9683 per dollar on Tuesday morning.
China also announced that it would stop buying U.S. agricultural products, one day after its state-owned media said Beijing won’t be bullied and would “fight back.”
The moves came after the U.S. slapped more tariffs on Chinese goods last week.
Japan’s Nikkei 225 traded 2.1% lower. Data from the labor ministry showed the country’s real wage in June fell 0.5% from a year earlier, compared with a downwardly revised 1.3% annual decline in May.
South Korea’s KOSPI was down 0.7%.
Down under, Australia’s ASX 200 slumped 2.6%.
Overnight, the Wall Street suffered their worst one-day losses since early December due to the escalating Sino-U.S. trade war.
The Dow closed down 2.9%. The S&P 500 dropped nearly 3.0% and the Nasdaq Composite index fell about 3.5%.