Shanghai Composite declines amid US tariff worries and auto sector pressure

NOOR MOHMMED

16/May/2025

Shanghai Composite fell 0.4% and Shenzhen Component declined 0.3% amid ongoing worries over US tariffs and their impact on China’s key industries, especially autos.
Despite reduced tariffs on some Chinese goods, US aims to reduce reliance on Chinese imports, keeping trade tensions a market risk.
Investors await next week’s economic data on retail sales and industrial production for further insight on trade impacts on China’s economy.

The Shanghai Composite index fell 0.4% to below 3,370 on Friday, while the Shenzhen Component dropped 0.3% to 10,160, marking a second consecutive session of declines for mainland Chinese stocks. This downward trend is largely attributed to persistent concerns surrounding ongoing US tariff measures that continue to dampen investor sentiment.

Although the US has recently announced reduced tariffs on certain Chinese goods, market analysts caution that significant levies remain in place, continuing to exert pressure on critical sectors within China’s economy. One of the most affected sectors is the auto industry, which is a major exporter of vehicles and auto parts to the US. The ongoing tariff-related challenges in this sector contribute heavily to the cautious outlook among investors.

Moreover, the US government has reiterated its goal to lessen dependency on Chinese imports, signaling that while negotiations have made some progress, trade tensions are unlikely to be fully resolved in the near future.

Investor focus is now shifting towards key upcoming economic data releases expected next week, which include retail sales and industrial production figures. These indicators will provide valuable insights into the broader economic impact of the trade environment on China’s growth prospects.

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Shanghai Composite declines amid US tariff worries and auto sector pressure

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