“Both sides seem to have a planned course of action right from the beginning,” said Ben Kwong Man-bun, a director at brokerage firm KGI Asia. “Safe-haven sentiment is strong across all market sectors, but especially among large caps and those which have risen a lot,” which prompts investors to sell their holdings to take cover, he said.

A tit-for-tat spat between the two countries – with US$520 billion of trade between them as of 2016 – imperils the entire world, weighing down on almost every equity market in the Asia-Pacific region from Seoul to Auckland. Karachi and Laos were the only two stock markets that recorded gains.

Still, the real impact on China’s economy is expected to be limited, according to Gao Ting, head of China strategy at UBS Securities. Assuming that the full tariffs are passed through to consumers, US levies may cut China’s 2018 economic output by a mere 0.1 per cent, he said.

The “impact could be even less for the MSCI China Index since internet companies and financials, which have a large weight in the index, are not directly related to the trade friction,” Gao said.

Hong Kong’s benchmark Hang Seng Index plunged as much as 1,140.8 points, or 3.7 per cent, to 29,930.23, the biggest intraday point drop since February 9, before regaining some of the initial losses to close 2.5 per cent lower. The Hang Seng China Enterprises Index fell as much as 488.31 points, or 3.9 per cent, to 11,939.24 before closing down 2.4 per cent.

“Raising tax on US pork will certainly hurt pork producers in the US,” said Lu Guanghua, chief executive of Zhushiji Pig Breeding Farm. “China imports only frozen pork from the US, and a lot of it is pig viscera that goes into products like sausages. The prices for fresh pork will stay stable, but processed meat may become slightly more expensive.

Li & Fung, a local logistics and trading giant that generates almost two thirds of its revenue in the US, saw its shares plunge 10.2 per cent. Hong Kong’ AAC Technologies, which gets 60 per cent of its revenue from the US, fell 7 per cent.

Shares of Chinese manufacturers fell, amid concern that Trump’s tariffs will hit them the hardest, making their exports more expensive and uncompetitive in the US market. The Shenzhen Manufacturing Index, which tracks the performance of 1,410 manufacturers in southern China’s industrial and technological hub, fell as much as 6 per cent to 1,924.53, its biggest intraday percentage plunge since April 2016, before finishing 4.6 per cent lower.

The Shanghai Composite Index declined 3.39 per cent or 110.72 points to 3,152.76 while the CSI 300 – which tracks the large caps listed in Shanghai and Shenzhen – dropped 2.87 per cent or 115.41 points to 3,904.94.

The Shenzhen Composite Index lost 3.62 per cent or 67.02 points to 1,782.58 while the Nasdaq-style ChiNext slumped 5.02 per cent or 91.21 points to 1,726.02.

But it was not all losers. Farm producers gained, on optimism that any tariff on American agricultural produce would drive consumers toward local foodstuffs, vegetables and seeds. The Shenzhen Agriculture Index of 27 stocks jumped as much as 4.6 per cent, the biggest intraday percentage gain in eight months before closing 1.6 per cent higher. Shandong Denghai Seeds, which trades in corn seeds, flowers and vegetable seeds, surged by its 10 per cent daily limit to 12.19 yuan.

“Even if the current sabre-rattling from the US and China is a prelude to negotiations, further volatility is to be expected as trade tensions simmer,” DBS Bank analyst Eugene Leow said.

Additional reporting by Yu Xinyan