U.S. President Donald Trump escalated a trade dispute with China by increasing tariffs on Chinese imports to 125% from the previous 104% level. This move came after Trump had initially planned steep reciprocal tariffs on many trade partners but changed course. In response, Beijing imposed 84% tariffs on U.S. imports, matching Trump's earlier actions and affirming its commitment to combatting the growing trade tensions between the two largest economies.

Market reactions saw positive trading on the CSI 300 Index and Hong Kong's Hang Seng Index as investors anticipated domestic policy interventions to counteract tariffs and state-driven stock purchases.

HONG HAO, CEO AT HUAFU INTERNATIONAL, HONG KONG, commented that the current market rebound was mostly technical. He noted Trump's recent conciliatory tone and willingness to negotiate with China. China, well prepared in its responses, has shown confidence in its strategies amidst the evolving trade situation. With decreasing U.S. export dependence since 2018, China is seen as less vulnerable than before.

SAT DUHRA, PORTFOLIO MANAGER AT JANUS HENDERSON INVESTORS, SINGAPORE, highlighted the ongoing uncertainty and irreversible impacts of the trade dispute. The prolonged nature of discussions with China indicates a complex negotiation process, requiring careful consideration of China's potential mitigating strategies.

LIAM ZHOU, FOUNDER OF MINORITY ASSET MANAGEMENT, SHANGHAI, criticized Trump's unilateral policies, predicting their unsustainability due to internal and external pressures. Zhou argued that increased tariffs would not solve core issues like the trade deficit or manufacturing sector challenges but could instead lead to a U.S. economic downturn and damage its creditworthiness. China, with its diversified economy and technological advancements, is seen as better positioned to weather these challenges.