The escalating trade war between Washington and Beijing has jolted investors for the first time in months as a sharp sell-off in Chinese shares yesterday started a ripple through global markets that hit companies in big exporting nations particularly hard.

Investors have for weeks shrugged off the sabre-rattling by Donald Trump, US president, but analysts said his decision to impose tariffs covering $50bn in Chinese imports last week, followed by new signals that he would target an additional $200bn in goods if Beijing retaliated, was ratcheting up market anxiety.

“It became such a pervasive threat that the market shrugged it off. But this could be the beginning of bigger and badder things,” said Kristina Hooper, global markets strategist at Invesco.