China and Hong Kong stocks tumble on Trump's tariff threats

HONG KONG, Jan 22(Reuters) - China and Hong Kong stocks weakened on Wednesday after U.S. President Donald Trump hinted at potential new tariffs on Chinese imports, ending a brief reprieve for the markets.

The blue-chip CSEI 300 Index .CSI000300 declined 1.1% in early trade, the biggest retreat in nearly two weeks, and the Shanghai Composite Index .SSEC lost 0.9%.

Hong Kong's benchmark Hang Seng Index .HIS lost 1.5%, pulling back from a one-month high.

Sentiment took a hit after Trump said on Tuesday that his administration was still considering a 10% punitive duty on Chinese imports due to fentanyl issues.

That put an end to the short-lived relief in Tuesday's Asian trading hours after Trump held off announcing any China-specific tariffs on his first day back in office.

Sentiment will continue to come under pressure, which would weigh on risk assets, as there is a chance that Trump might announce more drastic measures to achieve his goals, analysts at Citic Securities said in a note.

Leading declines onshore, the real estate sector .CSI000952 tumbled 2.4% to pare gains made the previous day.

China's chip sector .CSI931865 also gave up earlier gains to decline 0.6%, after Trump announced a private sector investment of up to $500 billion to fund infrastructure for artificial intelligence to outpace rival nations.

(Reporting by Hong Kong Newsroom
Editing by Shri Navaratnam)

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