In the past two days - since Trump said in an interview with CNBC on Friday that he was ready to take a more aggressive approach by imposing tariffs on US$500 billion worth of Chinese products - neither the Chinese commerce ministry nor the foreign ministry has issued any statements.
"I'm ready to go 500", the Republican leader told the US network CNBC, referring to the $505.5 billion in Chinese imports accepted into the U.S.in 2017.
As China's officials determine whether to respond to Trump's yuan manipulation charge, economists say there are clear arguments for a cheaper Chinese currency, justifying the current weakness. "I'm doing this to do the right thing for our country".
USA equity futures turned lower after Trump's comments, and the VIX volatility index - known as the "fear gauge" - rose to its highest level since July 11. The S&P 500 index was virtually flat for the week while the Russell 2000 index, which is made up of smaller companies that do more business inside the US, rose 0.6 percent.
"Since it has already imposed or promised higher tariffs on over $US50 billion of United States goods, it has limited room to raise tariffs further".
"As a result, we reduce the size of our overweight in global equities". Unlike European markets they appear to be holding up against the backdrop of possible escalations between the USA and the EU and China, unlike markets in Europe which have come under heavy pressure this afternoon.
Beijing can't tax as many US goods - the United States exports far less to China than it imports - but it has other tools.
After a decent run to the upside this week the United States dollar has fallen back sharply today, largely as a result of last night's comments from President Trump, where he was critical of the Fed and the recent strength in the currency. Market participants attributed the currency's slight rebound to suspected intervention by state authorities.More news: North Korea still evading petroleum sanctions: US' Pompeo
European markets were not immune to the jitters.
South Korea's KOSPI dropped 0.1 percent and Japan's Nikkei lost 0.55 percent.
Europe's autos sector extended falls, down almost 2 percent after Trump's comments and set for their biggest losses day for three weeks.
But trade tensions are escalating anyway.
Meanwhile, political concerns in Italy returned, hitting government bonds and stocks. "This is still in line with the broader PBOC policy of introducing more volatility and letting the market play itself out". "It's not helpful that these parties are packed with euro sceptics".
The Hang Seng on Friday rose 213.62 points, or 0.8 percent, to 28,224.48, but fell 1.1 percent from 28,525.44 on July 13. The OPEC member suffered severe dollar shortages after the price of crude oil, its top export and the main source of FX, plunged in late 2014, prompting it to introduce capital controls in 2015.
In Taipei, the TAIEX on Friday closed up 96.73 points, or 0.89 percent, at 10,932.11 on turnover of NT$164.46 billion (US$5.35 billion). Gold increased for the first time in six trading sessions, climbing 0.6 percent to $1,230.21 an ounce.