Dollar, stocks stumble

China hits back at US tariffs

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SINGAPORE/LONDON:

US stock futures and the dollar fell on Tuesday, while Hong Kong shares slipped from two-month highs, as the US and China went tit-for-tat on tariffs and raised the spectre of a broader, damaging trade conflict.

"(The) trade war story remains alive and well and this has a lot further to play out," said Shane Oliver, Chief Economist at AMP in Sydney, as prices skidded around on news headlines.

S&P 500 futures, which had bounced in relief that Mexico and Canada cut last-minute deals to delay a US tariff hit, swung to a 0.2% loss, while the dollar index erased earlier gains to trade 0.1% lower at 108.86. European stocks slipped 0.1% in morning trading after falling 0.87% on Monday. Germany's DAX index was flat and Britain's FTSE 100 0.3% lower.

Hong Kong's Hang Seng scaled 2025 highs on hopes that China would also negotiate its way out of tariffs with US President Donald Trump, but later pared its gains slightly to trade about 2.8% higher, buoyed by hopes that Beijing will ramp up stimulus spending to counter US moves. An additional 10% US tariff on Chinese exports took effect at 0501 GMT, and minutes later Beijing announced it was investigating Google and imposing tariffs on imports of US oil, coal, gas, cars and farm equipment.