Analysts surveyed by Argaam said that the escalation of reciprocal tariffs between the US and China warns of further economic slowdowns and disruptions in global supply chains.
They added that financial markets have become more vulnerable to sharp volatility with every new development in the conflict, amid declining risk appetite and a shift of liquidity toward defensive assets. 
On the other hand, they predicted that any de-escalation in the trade war could pave the way for an economic recovery, boosting investor confidence and driving increased domestic and international spending.
The analysts pointed out that the trade balance tilts in favor of China, given the US’ heavy reliance on its products. China has adopted a strategy to reduce its dependence on the US market through diversifying its markets and using financial tools such as currency devaluation to offset the impact of tariffs.
State of Chinese Markets
Khalid Al-Amri, an analyst and investor in Chinese markets
Khalid Al-Amri, an analyst and investor in Chinese markets, said that the Hong Kong Stock Exchange (HKEX) witnessed its largest single-day drop since the 1997 crisis, plunging 13% in one session.
He added that the exchange has fallen by nearly 9% since the announcement of tariffs in April 2025, reflecting investors’ concerns over the effects of protectionist policies.
Li Sheng, a strategic advisor at Exness, confirmed that Chinese markets experienced volatility over the past two weeks, despite a rebound in the SSE Composite Index after some tech products were exempted from US tariffs.
Sheng noted that trade tensions escalated due to new US tariffs and countermeasures by China, raising fears of long-term economic impacts. She explained that the rise in exports in March was temporary, driven by companies rushing shipments, while the decline in imports reflects ongoing challenges. Sheng highlighted that the market remains under pressure and may need additional government support.
Most Affected Sectors
Al-Amri said the actual impacts remain unclear due to daily changes in customs policies, but some affects have begun to emerge, especially in the US market. Companies relying on manufacturing in China or Vietnam, such as Nike and Lululemon, have recorded their lowest valuations in the past decade.
He explained that US tech companies were notably affected due to their heavy reliance on global supply chains, along with high valuations based on expectations of strong future growth. As fears of an economic recession grew, the market began reevaluating these projections, leading to declines in growth stock prices.
Al-Amri pointed out that some defensive sectors, like healthcare and essential consumer goods, saw temporary gains. This positive performance is linked to two main factors; first, these companies were trading below their fair value before market disruptions; second, they are favored by investors seeking safe havens amid volatility and fears of recession.
Meanwhile, Sheng confirmed that the tech sector was among the most hit by US tariffs, noting that Trump’s administration easing tariffs on imports of Chinese smartphones, computers, and other electronics temporarily relieved pressure on major companies like Apple, which heavily relies on manufacturing in China.
She added that the sector still faces price increases and disruptions in supply chains, particularly in data center construction and equipment. Some components, such as semiconductors, may be subject to new tariffs, affecting companies in both the US and China.
Analysts surveyed by Argaam said that the escalation of reciprocal tariffs between the US and China warns of further economic slowdowns and disruptions in global supply chains.
They added that financial markets have become more vulnerable to sharp volatility with every new development in the conflict, amid declining risk appetite and a shift of liquidity toward defensive assets.
On the other hand, they predicted that any de-escalation in the trade war could pave the way for an economic recovery, boosting investor confidence and driving increased domestic and international spending.
The analysts pointed out that the trade balance tilts in favor of China, given the US’ heavy reliance on its products. China has adopted a strategy to reduce its dependence on the US market through diversifying its markets and using financial tools such as currency devaluation to offset the impact of tariffs.
State of Chinese Markets
Khalid Al-Amri, an analyst and investor in Chinese markets
Khalid Al-Amri, an analyst and investor in Chinese markets, said that the Hong Kong Stock Exchange (HKEX) witnessed its largest single-day drop since the 1997 crisis, plunging 13% in one session.
He added that the exchange has fallen by nearly 9% since the announcement of tariffs in April 2025, reflecting investors’ concerns over the effects of protectionist policies.
Li Sheng, a strategic advisor at Exness, confirmed that Chinese markets experienced volatility over the past two weeks, despite a rebound in the SSE Composite Index after some tech products were exempted from US tariffs.
Sheng noted that trade tensions escalated due to new US tariffs and countermeasures by China, raising fears of long-term economic impacts. She explained that the rise in exports in March was temporary, driven by companies rushing shipments, while the decline in imports reflects ongoing challenges. Sheng highlighted that the market remains under pressure and may need additional government support.
Most Affected Sectors
Al-Amri said the actual impacts remain unclear due to daily changes in customs policies, but some affects have begun to emerge, especially in the US market. Companies relying on manufacturing in China or Vietnam, such as Nike and Lululemon, have recorded their lowest valuations in the past decade.
He explained that US tech companies were notably affected due to their heavy reliance on global supply chains, along with high valuations based on expectations of strong future growth. As fears of an economic recession grew, the market began reevaluating these projections, leading to declines in growth stock prices.
Al-Amri pointed out that some defensive sectors, like healthcare and essential consumer goods, saw temporary gains. This positive performance is linked to two main factors; first, these companies were trading below their fair value before market disruptions; second, they are favored by investors seeking safe havens amid volatility and fears of recession.
Meanwhile, Sheng confirmed that the tech sector was among the most hit by US tariffs, noting that Trump’s administration easing tariffs on imports of Chinese smartphones, computers, and other electronics temporarily relieved pressure on major companies like Apple, which heavily relies on manufacturing in China.
She added that the sector still faces price increases and disruptions in supply chains, particularly in data center construction and equipment. Some components, such as semiconductors, may be subject to new tariffs, affecting companies in both the US and China.
