"China trade friction, it is hard to buy the dollar for the yen aggressively", an official at a foreign exchange margin trading service provider said. Japan's benchmark Nikkei 225 index plunged 4.5 per cent to 20,617.86, its second-biggest daily decline in a year, and South Korea's Kospi tumbled 3.2 per cent to 2,416.76. China claimed that the slides back its stance.
The U.S. currency briefly rebounded to around ¥105.10 later, supported by Japanese importers' routine purchases, traders said. "China hopes the United States will pull back from the brink, make prudent decisions, and avoid dragging bilateral trade relations to a unsafe place". That doesn't take into account how much of the manufacturing and assembly of Apple products is done in Chinese factories, which could be affected if trade restrictions start piling up. That continued Thursday, after U.S. Trade Representative Robert Lighthizer said the tariffs won't apply to the European Union, Canada, Mexico, Argentina, Brazil and Australia. It is impossible to imagine that they can not. "And then we expect the U.S.to retaliate further".
While China retaliated to Trump's decision to impose tariffs on Chinese imports, the U.S. said India may be in a position where it would want to retaliate.
China's commerce ministry warned that a 15% tariff on 120 goods worth nearly $1 billion - including fresh fruit, nuts and wine - would be imposed if the USA fails to reach a "trade compensation agreement" within an unspecified timeframe.
While Beijing has yet to target US soybeans, speculation mounted that the oilseed could be next.
But riling China has always been central to Trump's strategy as president.
The response from China was measured, but more retaliatory actions could be in the works.
That is because millions of tonnes of cheap Chinese steel would still be on the market even if trade tariffs did make it unviable in the US.
Asian stock markets were the heaviest fallers, playing catch-up after European indices and Wall Street had already slumped in Thursday trading on the latest developments.
Not everyone believes the two nations are headed inexorably for a trade war.
In addition, the United States launched a challenge at the World Trade Organization on Friday, saying in a statement that China appears to be breaking WTO rules by denying foreign patent holders rights "to stop a Chinese entity from using the technology after a licensing contract ends". Last year, the United States imported $506 billion in goods from China.
Egypt to Shutdown Uber and Careem for Allegedly Violating the Law
Drivers with Uber and Careem say they are harassed both by taxi drivers and by police - echoing concerns elsewhere in the region. The apps are especially popular among women, who face rampant sexual harassment in Egypt, including from some taxi drivers.
"We don't want any trade war with anyone", Cui was quoted.
But Ni Feng, deputy director of the Institute of American Studies at the Chinese Academy of Social Sciences in Beijing, said there was no doubt the situation was "deteriorating".
Smaller companies have held up better than larger ones during the recent tumult over tariffs, in part because they do more of their business inside the USA and have less to fear from worldwide trade disputes. However, Trump himself increased the limit to $60 billion in tariffs on Chinese products.
The likely victor of this trade war will be other countries, particularly countries from South America.
Trump argues that previous US presidents were way too soft on China. Bullish investors hope that the administration will dial back on its tough stance with China, similar to how tariffs on steel and aluminum imports were later scaled back significantly.
Trump's bold trade moves did generate praise from an unexpected source in the US Congress - the Democratic party. Analysts say this could boost shares across the board.
There are also reports that war between the world's two largest economies jolted China's markets on Friday, with the country's main stock indexes tumbling the most in six weeks, while bond yields fell as investors rushed into less risky assets.
"China has done a very, very good job since it entered the WTO in 2001 of carefully constructing its protectionist policies, and other unfair policies, in a way that allows them to skirt WTO disciplines", he said. Trump is taking that further.
"It's remarkable how badly Xi Jinping has mishandled and damaged the U.S. Negotiations are much better for everyone". But investors are concerned tensions will keep rising, and that a round of sanctions and retaliation will affect the global economy and corporate profits.
For some in China, that sends a worrying message. "It's a structural problem which has nothing to do with either the trade deficit or employment".
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