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    Asia stocks plummet as US-China trade war intensifies; offshore yuan slumps to new low

    Stocks in Asia fell Monday morning following an escalation in the U.S.-China trade war late last week.

    Hong Kong's Hang Seng index led losses in the region as it plunged 3.22% in early trade, following another weekend of violent protests in the city.

    Mainland Chinese stocks also saw declines. The Shanghai composite shed about 1.2% and the Shenzhen component slipped 1.15%. The Shenzhen composite also fell 1.308%.

    The Nikkei 225 in Japan dropped 2.33% in morning trade, while the Topix index declined 1.97%. Losses were also seen over in South Korea, where the Kospi fell 1.59%. Australia's S&P/ASX 200 shed 1.54%.

    Overall, the MSCI Asia ex-Japan index declined 2.02%.

    US-China trade war heats up

    U.S. President Donald Trump tweeted last Friday that America will hike tariffs on $250 billion worth of Chinese goods to 30% from 25%.

    Tariffs on another $300 billion in Chinese products will also go up to 15% from 10%, Trump said. The levies on the $250 billion worth of goods are scheduled to kick in Oct. 1, while the duties on the $300 billion are set to go into effect in two stages on Sept. 1 and Dec. 15.

    At the G-7 summit over the weekend in France, Trump said he regrets not raising tariffs even higher, adding that he could declare the U.S.-China trade war a national emergency.

    Beijing unveiled new tariffs last Friday on $75 billion of U.S. goods. That was in response to Trump's surprise announcement earlier this month that the U.S. would impose duties on another $300 billion of Chinese goods — some of these items have since been delayed to December or removed from the list.

    "This tit-for-tat escalation shows how unlikely a trade deal and de-escalation have become," Louis Kuijs, head of Asia economics at Oxford Economics, wrote in a note. "It is now unlikely that the existing and planned trade restrictions will be removed any time soon, while other kinds of restrictions may also be introduced."

    Markets stateside were sent tumbling last Friday after Trump ordered U.S. firms to "start looking for an alternative to China," with the Dow Jones Industrial Average plunging more than 600 points.

    "In the last 20 years, U.S. corporates have built big positions in China," Richard Martin, managing director at IMA Asia, told CNBC's "Squawk Box" on Monday.

    He added that American businesses are now "nervous on two levels."

    "It's not only what Trump might do with his emergency powers, it's the response that you'll get in China," Martin explained. "Not necessarily just the response from the government, it's the response from ordinary people and companies in China who might say 'the U.S. firms are no longer our friend.'"

    Perceived safe havens rally

    The Japanese yen, often viewed as a safe-haven currency during times of market turmoil, traded at 105.22 against the dollar after touching levels above 106.2 last week.

    Similar gains was seen elsewhere in the morning of Asian trading hours as investors headed toward defensive plays such as spot gold, which jumped 1.15% to about $1,543.68. The yield on the closely-watched 10-year Treasury note fell to 1.4879%. Bond prices move inversely with yields.

    Asia-Pacific Market Indexes Chart

    Chinese yuan slips, oil prices fall

    Amid the market turmoil, the offshore Chinese yuan fell to a record low of 7.1858 against the dollar. It last traded at 7.1597. Its onshore counterpart was at 7.1398 against the dollar.

    The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.694 after seeing levels above 98.0 for much of last week. The Australian dollar changed hands at $0.6727 after slipping from highs above $0.678 the previous trading week.

    Oil prices dropped in the morning of Asian trading hours, with international benchmark Brent crude futures slipping 1.5% to $58.45 per barrel and U.S. crude futures dropping 1.9% to $53.14 per barrel.

    Here's a look at some of the data due today:

    • Singapore: Industrial production for July at 1:00 p.m HK/SIN
    • Hong Kong: Merchandise trade for July at 4:30 p.m. HK/SIN

    — CNBC's Fred Imbert and Yun Li contributed to this report.

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