The iShares China Large-Cap ETF (NASDAQ:FXI) had gained as much as 4.6% to $31.39 Tuesday morning, before reversing heavily and falling 2.4% to $29.28 Tuesday afternoon as U.S.-China trade tensions reached new highs.
What To Know: Beginning Wednesday at 12:01 a.m. ET, the U.S. tariff rate on Chinese goods will spike to 104%, a White House official confirmed.
Trump had warned of a 50% tariff increase unless Beijing removed its retaliatory duties by Tuesday. However, China stood firm, refusing to lift its 34% counter-tariffs and responding with export controls on rare earth minerals.
FXI, which tracks 50 of China's largest Hong Kong-listed firms including Alibaba Group Holding Ltd – ADR (NYSE:BABA) and JD.Com Inc (NASDAQ:JD), took a sharp hit as investors grew wary of weakened growth prospects and intensified trade friction. The ETF faces downside pressure from expectations of supply chain disruptions and softer global demand.
Additionally, with JPMorgan estimating a 60% chance of a global recession, FXI remains vulnerable amid deteriorating U.S.-China relations.
Read Also: Apple Is A ‘Buying Opportunity’ Again As Key Valuation Level Flashes Green, Bank Of America Says
According to data from Benzinga Pro, FXI has a 52-week high of $38.73 and a 52-week low of $23.61.
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