Global markets are expected to sell-off on Monday, as the US and China continue to aggravate trade tensions between them.

The Australian Securities Exchange (ASX) was the first major market to open, with futures trading indicating a fall of around 1.3 per cent. In just the first 15 minutes, it had dropped more than 105 points or 1.62 per cent — worse than expectations. The sell-off then pulled back very slightly. As of 12pm, the ASX 200 was down around 96 points or 1.48 per cent.

The Japanese market was tracking worse, with the Nikkei 225 down around 2.3 per cent after two hours of trading. Korea’s KOSPI was down 1.6 per cent over a similar period. After just one hour of trading, China’s Shanghai Composite was down more than 1 per cent, while Hong Kong’s Heng Seng was battered by around 3.3 per cent — exacerbated by its own escalating political demonstrations.

It follows pronounced sell-offs on Wall Street on Friday, with the Dow Jones shedding 623 points, or 2.3 per cent. The S&P 500 and Nasdaq fared even worse, losing 2.59 per cent and 3 per cent apiece.

The losses followed the announcement of fresh Chinese tariffs on $US75 billion of American goods which caused President Trump to tweet that he would retaliate further on all Chinese imports, leading analysts to note the trade war had reached “new heights”.

“China should not have put new Tariffs on 75 BILLION DOLLARS of United States product (politically motivated!). Starting on October 1st, the 250 BILLION DOLLARS of goods and products from China, currently being taxed at 25%, will be taxed at 30%…Additionally, the remaining 300 BILLION DOLLARS of goods and products from China, that was being taxed from September 1st at 10%, will now be taxed at 15%,” the President tweeted.

Meanwhile, US Federal Reserve chair Jay Powell indicated that the central bank may not cut US interest rates as much as anticipated, saying there was little the central bank could do to ease the trade war fallout.

That too angered the US President, with Trump bizarrely suggesting Powell was doing more to hurt the US than Chinese President Xi Jinping.

“As usual, the Fed did NOTHING!” the president wrote on Twitter. “We have a very strong dollar and a very weak Fed. I will work ‘brilliantly’ with both, and the U.S. will do great…….My only question is, who is our bigger enemy, Jay Powel (sic) or Chairman Xi?”

This article first appeared on Business Insider Australia, Australia’s most popular business news website. Read the original article. Follow Business Insider on Facebook or Twitter.