China's stocks and currency came under pressure as markets returning from a week-long break were greeted by a new trade dispute with the United States and ructions in the global artificial intelligence sector.

China’s tariff increases and other countermeasures were mostly symbolic and apparently designed to project strength while leaving the door open to talks.

Beijing has made its decision. After days of warning of counter measures and urging Washington to enter negotiations and "meet China halfway", it has decided to hit back – or at least threaten to retaliate with its own tariffs.

But Mr Trump’s most incendiary claims are reserved for China. The Communist Party, he says, “has subsidised and otherwise incentivised” Chinese firms to “export fentanyl and related precursor chemicals that are used to produce synthetic opioids sold illicitly in the United States”.

As Trump’s new 10 percent tariffs on all Chinese imports took effect, China hit back with tariffs and sanctions of its own.

Asian equities were mixed overnight as the Philippines, Taiwan, and South Korea outperformed, Thailand underperformed, and Pakistan was closed for Kashmir Solidarity Day.