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Asian Markets Suffer Steep Losses Amid Escalating US-China Trade War

A currency trader watches the computer monitors near the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room in Seoul, South Korea.

Shockwave from massive selloff on Wall Street Monday reaches Asia, triggered by escalating US-China trade war

The escalating trade tensions between the United States and China that sent U.S. stock prices plunging Monday continued to reverberate around the globe as Asian stock prices opened sharply lower at the start of Tuesday's trading session.

Both Japan's benchmark Nikkei and Hong Kong's Hang Seng indexes both opened less than two percent at the opening bell, while China's benchmark Shanghai index dropped more than 1.5 percent at the start. Australia and South Korea also posted sharp losses in their early morning trading.

Tuesday's sell-offs in Asia came hours after Wall Street posted its worst losses of the year, with the S&P 500 index losing three percent on Monday, while the tech-heavy Nasdaq dropped 3.5 percent and Dow Jones losing nearly three percent. The selloff was triggered by Beijing's decision to allow its currency to fall to weaken to its lowest point in 11 years, triggering an angry response by U.S. President Donald Trump on Twitter, accusing China of manipulating its currency.

China's move to devalue its currency gives its exporters a price edge in world markets.

Hours later, the U.S. Treasury Department officially designated China a currency manipulator.

The months-long trade war between the world's two biggest economies worsened last week when President Trump announced plans to impose a 10 percent increase of tariffs on Chinese exports to the U.S. worth $300 billion. China has retaliated by ending all new purchases of agricultural products from the United States.