The Trump administration's latest shot at the trade war with China has shaken global financial markets.
The US government said it was preparing new tariffs of 10% over $ 200 billion Chinese products, releasing a list that includes fruits and vegetables, handbags and baseball gloves.
The Shanghai compound fell 1.8% and the Hong Kong Hang Seng fell 1.3% on Wednesday. China's currency, the yuan, fell around 0.5% against the dollar.
Other markets were also suffering: Japan's Nikkei closed down 1.2%. The main European indices fell more than 1% in the first operations, and the futures of Dow pointed to 1% less.
China's stock market is one of the worst performing in the world in 2018, overwhelmed by fears of a slowdown in the country's economy and the trade shock with the United States. The Shanghai index entered a bear market late last month, which means it has fallen more than 20% since its most recent peak.
Related: The United States prepares new tariffs on another $ 200 billion of Chinese products
Among the Chinese stocks caught in the crossfire on Wednesday were companies with strong ties to the US market. Shares in the main appliance manufacturer Qingdao Haier sank more than 2%. The new US list targets products that include refrigerators and air conditioning units.
The announcement by the United States comes a few days after the United States and China imposed tariffs of 25% on $ 34 billion of each other's exports.
Jingyi Pan, a market strategist based in Singapore in the IG Group broker, said investors were now preparing for Beijing retaliation in the form of more tariffs and "other creative methods" to show their displeasure. That could include making life difficult for US companies that operate in the second largest economy in the world.
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The Chinese Ministry of Commerce said on Wednesday that the Trump government's announcement of new measures was "unacceptable". He warned that China would have to respond with "necessary countermeasures", but did not give details.
Gao Qi, a Singapore-based exchange strategist at Scotia Bank, said the absence of any planned trade negotiations to calm tensions between the two governments was increasing investors' anxieties.
The Trump administration must impose tariffs on another $ 16 billion in Chinese goods this summer, which could put the yuan even further under pressure, Qi said.
The Chinese currency fell sharply against the dollar last month as fears about the trade war increased. China's central bank spoke last week, saying it is "paying close attention" to recent fluctuations in the currency market and will seek to keep the yuan stable at a reasonable level.
Qi said he was advising clients to sell the yuan and buy the Japanese yen, a currency that is often considered a safer asset in periods of market turmoil.
CNNMoney (Hong Kong) First publication on July 11, 2018: 12:40 AM ET