• The move marked a major escalation in trade tensions between the world’s two largest economies and a shift in tone from Mr. Trump, who cited progress in talks as recently as Friday.

BACKGROUNDS:

• Chinese investors, caught off guard by U.S. President Donald Trump’s tariff threats, dumped stocks and sold the country’s yuan on Monday as a fresh deterioration in Sino-U.S. trade tensions roiled Asian financial markets.
• China’s major stock indexes extended losses after opening sharply lower. Both the blue-chip CSI300 index and the Shanghai Composite Index tumbled more than 5 percent in morning trade. Hong Kong’s Hang Seng index slumped more than 3 percent.
• Fanning expectations that the latest trade developments could lead to new monetary easing, China’s central bank said on Monday it will cut reserve requirement ratios (RRRs) for small and medium-sized banks.
• China’s currency, the yuan, dropped to 6.7980 per dollar in early trade, its weakest level in 3-1/2 months, while 10-year treasury futures for June delivery, the most traded contract, rose 0.3 percent.